As we look forward to the New Year and 2023, January can be a challenging time for some industries. In particular, the retail sector, with the “holiday return” blues. The National Retail Federation (NRF) reports from a recent member survey, that most companies expect to receive 80.65% of their returns in January. In 2021, the total rate of returns (16.6 percent) was up from 10.6 percent during 2020, but online returns in 2021 are in line with recent years at an average of 20.8 percent. According to the NRF, online sales accounted for $1.050 trillion of total U.S. retail sales last year. Approximately $218 billion of online purchases were returned, with $23.2 billion (10.6 percent) deemed fraudulent.
It also noted that for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud. The categories with the highest return rates were similar to 2020 metrics: auto parts (19.4 percent), apparel (12.2 percent) and home improvement and housewares (tied at 11.5 percent). The most common types of payment used during the original purchase that led to a return were credit cards (22.78 percent), cash (12.69 percent) and debit cards (7.04 percent). Nonetheless, merchandise returns are a regular part of doing business whether online or in person. Customers expect returns policies to enable them to return unwanted items quickly and easily. However, many fraudsters aim to exploit a merchants return policy to their advantage for monetary gain. This kind of fraud is called return fraud or policy abuse.
As a consequence, in the competitive world of retail, it is essential to understand how returns and return fraud reduce net sales and contribute to inventory shortage (shrink) and total loss. This information can be used by loss prevention professionals to compare their own program results, with an eye toward developing best practices and reducing losses from returns.
In today’s article, we concentrate on the growing issue of return merchandise fraud called, ‘bricking fraud,’ and which TydenBrooks security solutions you can use to protect your business and mitigate return fraud losses.
Mitigating Return Fraud
In cases of bricking fraud, sophisticated fraudsters cleverly ‘reseal’ the returned merchandise. Unsuspecting employees avoid fully inspecting the original item packages and restock the goods as ‘open box’ or ‘refurbished’ items. Consumers may be aware of the risk of buying these kinds of items, but oftentimes online merchants do not make the distinction clear and simply resell the items as regular inventory. Once a consumer receives a bricked item, they often post pictures on social media leading to negative reviews and impact on the merchants reputation.
A cost-effective and proven TydenBrooks solution to this issue is our tamper evident security tapes and labels. Recognized for their ability to ‘pay for themselves’ when compared to the amount of added protection they provide against loss prevention in end-to-end security, they can be applied across the closures of all sizes of cardboard boxes and anytime in the transit stream; at the staging areas, on-site return pick-up, repacking at fulfilment centers, reverse logistics and out to retail stores. They’re also adaptable enough to be applied on painted surfaces, metals, plastics, polyethylene bags, crates, glass and even wood. Security tapes are easily applied with a standard dispensing tape gun, but also have an option for machine sized application reels. Security labels such as our KR, KL, and KC security labels come standard on perforated rolls for easy peel and apply suited well for smaller packages.
Tamper evident tapes and labels can be sequentially numbered (both sub surface and surface), barcoded, and can have customized QR codes, logos, languages, and colors for an overt or covert design. As an added layer of return fraud security, retailers and shippers can include a customized hologram or a custom void message in security tape or label strips. This can arrive in the shipping carton to cover the original item carton for a potential return or if it’s an at-home return the customer or driver can place the custom tape or label on the carton to ensure the item contents. If a return is being processed at a shipping drop-off location, it can be inspected and authenticated by a clerk using the same process.
Overt and Covert Tape Solutions
Permanent tamper evident security tapes such as our KTC or KT+ security tapes provide a clear indication of tampering by revealing a hidden message when the tape is peeled off or altered and cannot be replaced as it permanently marks the surface it’s applied too. They also keep your internal operations secure by reducing shrinkage and pilfering. Overt security tape is designed to make it obvious that it is a form of security tape to act as a visual deterrent, thus putting off people who want to tamper with it while keeping our normal security features underneath.
Covert security tape has been designed to look like a normal box tape until it is removed revealing a void message underneath, this is designed to highlight when a box has been tampered and potentially highlight a weak spot in the supply chain with the track and trace abilities of the tape allowing you to narrow down when the box has been tampered.
Custom Inks and Adhesives
Tamper evident tapes and labels can be customized in multiple ways to make them more identifiable, unique, and can be virtually impossible to copy. A recognized solution is using holographic print. This additional layer of security is overprinted on the label making them easier to spot during quick checks and more identifiable and brand specific through customization of the holograms design. If your shipping lithium battery electronics, foods, or other temperature sensitive products we have the option of irreversible thermochromic inks. Thermochromic inks turn transparent when heat is applied and can also detect temperature history during shipping.
Whether you require photochromic, glow in the dark inks, or high temperature or low temperature adhesives, with customer specific text in the voiding and surface message, we have the proven tamper evident tapes and label solutions to reduce shrinkage, illegal product resales, and costly fraudulent returns.
Leading the Way, Securing the World
Inexpensive TydenBrooks tamper evident tapes and labels are an affordable and effective means to put off would-be criminals and anyone who would try to gain from tampering with a product or removing it from within your supply chain.
Contact us at 1-800-458-7325 (SEAL) or [email protected] to discuss your application requirements and learn more about how our security solutions will increase your operations cargo security and reduce losses. Shop for our solutions and products at www.tydenbrooks.com
