Retailers are losing $100 billion/year to return fraud

More malicious fraud is costing retailers big.

September 15, 2023

Welcome to the Retailist Roundup - As summer winds down, the transition to fall brings with it a surge in back-to-school trends and an uptick in business news. Here, we provide you with the latest updates in ecommerce, retail, and DTC brands, curated directly by our editors.

We've distilled the past week to present the most significant headlines, emerging trends, and insights from global retail experts. Here's a look at the standout topics this week:

New from Retailist

Demands now emphasize transparency, seamless transactions, and instant access to information. In fact, a remarkable 86% of B2B decision-makers now indicate a strong preference for self-service tools in reordering processes, a clear sign of a paradigm shift away from traditional sales interactions.

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In the News: This week’s top headlines

Square says outage was caused by DNS error. Square denied that a cyberattack was responsible for a recent outage, attributing it instead to a DNS issue. The problem arose from misconfigured DNS settings during routine updates to their internal network software, which made their systems unable to communicate with each other. This not only disrupted their services but also affected their internal troubleshooting and support tools.[TechCrunch]

Joann Undergoes Reconstruction. Joann, a craft retailer, has announced a restructuring of its corporate and field operations, leading to the elimination of positions across various departments. The company did not disclose the number of affected employees or details about severance packages. This announcement follows the recent retirement of Joann's CEO and a report showing a 2.1% decline in net sales for the quarter, despite a rise in e-commerce sales and gross profit.[Retail Dive]

Retailers are losing $100 billion per year. For the past three years, Robert has exploited Black Friday Hulu promotions by using different email addresses to get new customer discounts. He has also used similar tactics for deals on sports betting websites and Manga purchases. While Robert sees no issue with this "friendly fraud," a study by Riskified indicates that such practices, combined with more malicious fraud, cost retailers over $100 billion annually.[CNBC]

Making Sense of Dark Data. Dark data, analogous to the unseen dark matter in the universe, refers to the vast amount of unanalyzed information accumulated by businesses from various sources like website interactions and transaction records. While traditionally overlooked, advancements in AI technologies, such as NLP and ML, are now enabling businesses to harness this data, unveiling valuable insights and transforming marketing strategies. However, retaining such data without analysis can also pose significant security threats, emphasizing the need for its proper management. [CMSWIRE]

Wholesale Inflation Spikes. Wholesale inflation in August rose by 0.7%, primarily due to a significant increase in energy costs, exceeding analysts' predictions. This surge is the most substantial since June 2022, with energy prices increasing by 10.5%. Despite a general decline in inflation over the past year, recent hikes in oil prices, pushing gasoline costs higher, have led to a noticeable uptick in inflation.[US News & World Report]

Short Sellers Must Wait. Shares of Arm Holdings, a British chip designer under SoftBank, surged 18% above their offer price on their Nasdaq debut, valuing the company at nearly $60 billion. Analysts suggest that investors wanting to short the stock might need to wait a day or more as the new shares may not be immediately available for borrowing. Additionally, those interested in ARM options might have to wait until the following week due to regulatory requirements.[Reuters]

Hidden Junk Fees are the Worst. When recently buying tickets for a concert at Madison Square Garden, the author of this article was surprised to find no additional fees at checkout. Instead, the previously hidden fees were now included in the upfront ticket price, making the initial cost seem higher but the final price consistent with past experiences. This shift reflects a broader trend in online transactions where companies incorporate hidden fees into initial prices, manipulating consumer perceptions. [Insider]

Job Board: This week’s Top Openings in DTC, RetailTech, and more

Want to submit a role to our talent board? Email [email protected].

  • Principal Engineer- Cyber Security (Chicago, IL) Walgreens - more here

  • Senior Product Manager, Square Messages (Remote) Block - more here

  • Regional Sales Director- PA Region (Remote, PA Region) CarGurus - more here

  • Inbound Account Executive (Austin, TX) WP Engine - more here

  • Content Marketing Strategist (Remote) Teachable - more here

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