Returns are a cost of doing business for all sellers.
If not handled properly, it can create friction, disappoint customers, and discourage them from shopping with your company again.
con man? They are abusing the system, sometimes reporting that they never received the product or did not receive what they ordered and demanding a refund.
doriel abrahamsHead of Risk, United States; forterand Richard KosticCEO of 100% purestates that the same data used to fight fraudsters can be used to improve the returns process itself, and in doing so can improve customer loyalty.
today's trends
Bracketing, in which online shoppers purchase items in multiple sizes and return options that don't fit, is popular in the digital age, Abrahams said. Another study found that more than half of consumers confessed to returning a product after only using it once or twice.
“We believe that about 15% of returns are actually fraudulent or represent an abuse of the system,” he said. There are many scams where individuals return empty boxes to retailers or boxes filled with bricks. Some scammers will resell the items they receive after they have been refunded.
For sellers, Kostick adds, returns are costly from a 100% PURE perspective. Staff must be available to process returned items. For Kostic's company, which focuses on cosmetics, the fact remains that used inventory simply cannot be replaced. it must be destroyed. The company has moved to a policy where consumers can choose to keep their orders without returning them, but consumers also request a refund and keep the cosmetics, creating another fraud vector.
100% PURE then adopted a policy of moving from automated returns to a high-touch process, as returns were ongoing and required individuals to contact the company's customer service department. Kostic said staffers were taking “extensive notes” about customers they believed were abusing the process. These customers will have to return the product at their own expense, reducing fraud. Serial abusers are simply removed from the 100% pure customer base as the company refuses to do business with them. The company's return rate is about 2%.
Data is your key defense
The 100% PURE approach includes a personal touch, which is difficult to scale when you have millions of customers. Customers can also create new IDs online and continue abusing the return process.
As Abrahams pointed out, data can make the difference between keeping good customers and weeding out bad actors. Forter's platform helps users uncover their identities when they transact with his Forter partner companies, map those identities, and connect them to specific actions using generative artificial intelligence. Similarly, analytics and advanced technology can help you determine who your best customers are and automate returns, eliminating the need to contact customer service.
“The key is to teach AI models and systems to ‘think’ about how these people think and how to ask the right questions at the right time,” he said.
Analytics can reveal whether consumers are all coming from the same region or from a specific device. Kostic added that AI can also be used to improve interactions with consumers as high-touch customer service is delivered at scale.
Abrahams and Kostic say high returns can indicate a defective product or packaging, or simply that consumer tastes are changing, so AI can help with inventory management. He said it was also helpful. We may indeed be heading towards a future where personalized products are manufactured on demand, with positive knock-on effects for supply chain sustainability.
For now, data sharing will help differentiate good customers from bad ones, Abrahams and Kostic told PYMNTS. The battle will be long.
After all, Abrahams said, “There are people out there whose purpose in life is to find loopholes and small cracks in business processes and turn them into full-blown holes.”
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