New research has uncovered that retailers are losing money due to two distinct types of return-related issues: deliberate fraud and opportunistic misuse of lenient return policies. The study, conducted by Professor Michael Townsley and Dr. Andrew Childs from Griffith University, along with Professor Joseph Clare from The University of Western Australia, highlights the need for retailers to differentiate between these two problems. One involves outright deception, such as using fake receipts or returning stolen goods, while the other includes practices like "wardrobing," where a customer buys an item, uses it once, and then returns it for a full refund. Lead author Townsley, from the Griffith Criminology Institute, explained that treating all return misconduct as the same issue hampers retailers' ability to respond effectively. "Fraud involves deliberate deception, whereas abuse is more often opportunistic behavior where customers bend the rules and rationalize it as harmless," he said. "That distinction matters because the response needs to be different." Preventing fraud requires better verification processes, integrated data systems, and clear procedures for escalating suspicious returns. On the other hand, preventing abuse relies on clear return policies, consistent staff practices, and educating customers about the real costs of their actions. Wardrobing is a common example of abuse, where customers justify returning items after using them once by thinking the retailer can simply resell the goods. However, retailers bear the costs of processing, inspecting, discounting, or writing off these returned items. The research analyzed the scale and nature of returns misconduct using customer surveys, scans of online fraud communities, and detailed breakdowns of how return fraud and abuse are executed. The study also emphasized the role of online fraud communities, where individuals share methods, scripts, and advice for committing fraudulent returns. Co-author Dr. Childs noted that these online spaces make fraudulent returns easier to learn and repeat. "We found online communities where people exchange detailed instructions for fraudulent returns, including what to say to retailers and how to avoid detection," Childs said. "Some of these spaces also operate like informal mentorship markets, where less experienced offenders pay for advice from people who have already worked out which methods are most likely to succeed." The report recommends that retailers focus on building three core capabilities before introducing more restrictions on the returns process: stronger oversight of return policies, integrated data from purchase through refund, and better support for frontline staff. Once these foundations are in place, retailers can more effectively target fraud through stronger verification, risk scoring, and escalation of repeat deceptive behavior, while reducing abuse through clearer return rules, staff training, and customer education. "Retailers do not need to make returns harder for every honest customer," Townsley said. "The better approach is to know which problem they are dealing with." Fraud is mainly a verification and data problem, while abuse often stems from ambiguous rules and customer rationalizations, making staff training and clearer policies essential for addressing the issue effectively.