What is returns abuse? (2024)

FAQs

What is considered return abuse? ›

returns abuse) occurs when a customer uses the returns policy of a merchant so much that it becomes unprofitable. Customers may also abuse refunds by faking returns/receipts, or reselling merchandise.

For example, an opportunistic first-party can claim that they never received an item they actually received, and request a refund of their purchase. On the other hand, someone might claim to not have received their item in order to have a duplicate sent to them, intending to resell both but having only paid for one.

Yes, return fraud, refund fraud, or return theft are all illegal. Many fraudsters believe this to be a 'victimless crime,' but by governing bodies, they are considered a form of theft, as they can only occur by means of defraudation of stores and online eCommerce platforms.

Return fraud for property valued at $950 or less is a misdemeanor offense, punishable by up to 1 year in a Los Angeles County jail and/or $1,000. Return fraud for property valued in excess of $950 is a felony offense, punishable by up to 3 years in a California state prison and $10,000 in fines.

While refund abuse is deemed illegal and can lead to criminal charges, friendly fraud often stems from misunderstandings or disputes between customers and merchants.

In cases of erroneous claim for refund or credit, a penalty amount is 20 percent of the excessive amount claimed. An “excessive amount” is defined as the amount of the claim for refund or credit that exceeds the amount allowable for any taxable year.

Most retail stores allow you to return things you buy within a reasonable time for a full refund, credit, or an exchange. When a store clearly displays a limited or no-refund policy, however, refunds and exchanges are not required by law.

We will refund your delivery costs if the items arrive later than 12 noon. We guarantee to refund your money if you're not delighted with your purchase. If someone refunds your money, they return what you have paid them. We will gladly collect the item back for free and give you a refund.

Be clear about what you want.

Say if you want a full refund, an exchange, a store credit, a markdown on the item you bought, or a percentage discount on a future purchase. Explain why you want that result. Sellers are often more willing to offer a store credit than a refund.

What items can you not return? ›

Big or heavy items like furniture, for example, are top contenders for landfills. Luxury brands, too, are more likely to trash returns to avoid products ending up in secondary markets and tarnishing the label's value. And fast fashion without much value to start with is less likely to be worth recirculating.

Customers may have to return an item for any number of reasons. And while this is mostly seen by retailers as a cost of doing business, few people are aware that in many cases their returns are being tracked and those instances are being tabulated into a score.

If you take something without the expressed permission of the owner of the item, then it's called stealing - even if your honorable intentions are to return or replace the item before the owner realizes it's missing.

The Reality of Product Returns

Retailers commonly throw away returned products rather than repackage and restock them. According to Optoro, a technology company that helps retailers and brands manage returned and excess inventory, 9.5 billion pounds of returns ended up in U.S. landfills in 2022 alone.

But you may want to proceed with caution when making Amazon returns and limit the number of items you send back. If you go overboard, you could risk having your account yanked away.

So does returning items directly affect your credit? The only way is if you used a credit card to make the purchase, and returning it will drastically affect your credit utilization ratio.