Retailers may have lost an estimated £29m ($38.3m) to potentially fraudulent returns across one million returned orders, according to new analysis by omnichannel returns management specialist ReBound Returns.
As detailed in ReBound’s The Returns Fraud Playbook report, the findings are based on returned orders processed for retail clients between July 2025 and May 2026.
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It points to what the company described as shortcomings in retailers’ ability to identify and address returns fraud.
The report comes as online return rates approach 20% of sales, with the US online returns market estimated to be worth almost $850bn.
ReBound said retailers are particularly exposed because refunds are frequently issued before returned items are physically inspected.
It also noted that returns data is often fragmented across e-commerce platforms, stores and third-party marketplaces, making fraud detection more difficult.
ReBound Returns product manager Wouter ten Heggeler said: “The returns process has become a blind spot for retailers. Investment in fraud prevention is focused almost entirely on the point of purchase.
“Once a return is initiated, most retailers are operating without the visibility they need to catch what is actually coming back to them. The result is that many are absorbing losses they cannot identify, let alone measure or tackle the root cause.”
Based on its analysis, the company estimated that a mid-sized fashion retailer with annual sales of £100m, a return rate of 20% and a fraud rate of 5% could incur losses of around £1m each year from fraudulent returns.
For a large omnichannel retailer operating at the same fraud rate, annual losses could reach £3.5m.
At the enterprise level, a retailer generating £960m in annual sales and experiencing a 7% fraud rate could see losses rise to £20m annually.
The report also referenced figures from UK fraud prevention organisation Cifas, which found that 17% of adults do not regard falsely claiming a retail refund as illegal.
Among consumers aged 16 to 24, 35% said they would be willing to provide inaccurate information to secure a refund.
ReBound identified several behavioural patterns linked to suspected returns fraud.
Customers flagged as potentially fraudulent retained products for a median of 18 days before starting a return, compared with 9.5 days for typical returns.
Country-level analysis showed Poland recorded the highest identified returns fraud rate at 6.6%, followed by Denmark at 5.3%, both exceeding the overall average rate of 3.9%.
