6 Ways To Prevent Return Fraud

Return fraud is one of the most prevalent nuisances that internet-based companies have to deal with. Return fraud is when a customer buys a product with no intention of keeping it and instead plans on returning it after use for a refund. Knowing how to combat this without disappointing your customers can be difficult, so you need to take a gentler or firmer approach than you may want. Here are six ways to prevent an influx of customers who want to deceive you by regularly committing return fraud to cost you money.

1. Update Your Return Policy

Your return policy is your main line of defense against return fraud. If you spell it out clearly in your return policy, your difficult customers will have no choice but to accept that policy. If they refuse, you can rest easy knowing that you have done nothing wrong if you end up in an altercation. Your return policy should use simple, clear language that cannot be misconstrued to mean anything other than what you explicitly mean. You can even get a contract lawyer in on the process if you want to be as precise as possible in your language. You should also have your return policy list side effects, such as these Thrive side effects, so customers are not prompted to return products based on those unintended consequences.

2. Make Your Return Policy Visible

Even if you have carefully crafted your return policy to be as explicit as possible, some customers will still try to contradict you by claiming they have not seen the policy posted anywhere. To avoid this, there are two places you should have your return policy posted. Firstly, the policy should be published in a clearly marked section on your website with a large heading to make it unmissable. Secondly, and most importantly, you should show the policy at checkout and require all customers to check a box confirming that they understand it before completing the transaction.

3. Track Your Shipments

Online businesses are even more vulnerable than physical stores regarding return fraud because maliciously-minded customers can claim that they never received the ordered items. To combat this, you must install a foolproof tracking system for every order you send out. This ensures that you can pinpoint exactly where any package is at any time. Make it clear in your return policy that if you can prove that the item arrived, then you will not give any refunds. No legitimate customers should feel upset about this regulation.

4. Legitimize All Returns

When you do accept a return, always carefully inspect all returned items. Some customers may try to return merchandise that you did not sell them, which is perhaps the most egregious offense. Some customers may break or heavily use your products before returning them, which may or may not be against your return policy. No matter what, always make sure you verify the returns before refunding the money. This might be an unpopular policy, but it will help protect your business from losing money on the products that customers return to you.

5. Let Technology Help You

Tech companies have recognized the plights that online companies often encounter and have created software to help solve these problems. Fraud protection software allows you to monitor the orders you have shipped at every step of the process, enabling you to do everything listed in number three above. However, they can do even more than that. They can also protect all areas of your website from potential hackers and scammers who are prepared to do a lot more damage than customers who plan on committing return fraud ever could.

6. Use Resources From the Shipping Company

You should not be your only line of defense against return fraud. If you also have the shipping company on your side, you will be a force to be reckoned with for malicious customers. Shipping companies use a combination of the tips listed above and specialized software to help out companies as much as possible. You may have to search for the services they offer on their websites, but once you find them, you will not regret using them. It is always safer to have multiple people trying to prevent fraud.

Return fraud can lose companies thousands of dollars annually, and the most prominent companies can even lose millions. Those are frighteningly large numbers, so you want to ensure your company is as protected as possible. Following these simple tips is the first step to creating a secure online business, but you should always continue improving your protective measures. The day you stop improving is when people start getting things past you, delegitimizing your business against your will.