Signifyd, the market leader in trade protection, today announced the launch of its Return Abuse Prevention solution powered by Artificial Intelligence. AI), a customizable innovation that addresses a $ 43 billion problem by detecting returns abuse and enabling merchants to seamlessly offer refunds to valued customers while blocking those looking to cheat the system .
Signifyd’s Return Abuse Prevention solution gives merchants the flexibility to customize their return abuse response based on their unique business needs. Gives online retailers the flexibility to set up automated protections to alert customer service employees to the degree of risk involved with a return request, identifying them as low, moderate, or high risk, along with recommendations on whether to process the return and how to do it. It allows personalized policies, for example, a guide to never reject a return from a loyalty program member.
The Return Abuse Prevention solution also allows merchants to simulate how their return rules would work before implementing them in the real world. With the solution in place, retailers can apply their proposed return policies to previous purchase data and review the results of what happened.
” Sadly, scammers and a subset of consumers are becoming increasingly aggressive and resourceful in taking advantage of return policies designed to make life easier for shoppers,” said Gayathri Somanath, Vice President of Product at Signifyd. “ Return Abuse Prevention relies on Signifyd’s network data, machine learning models, and our new Decision Center module to give retailers the tools they need to stay ahead of this growing trend that crushes income”.
The new solution extends Signifyd’s identity-centric commerce protection to another crucial post-purchase checkpoint: the point of return and the initiation of the refund. It tackles one of the most annoying customer experience conundrums of today’s age of commerce.
Overcoming the returns challenge is more important now than ever, as e-commerce sales continue to rapidly become a major share of retail sales . Online purchases are much more likely to be returned and the percentage of fraudulent returns resulting from online orders is significantly higher than purchases made in a store.
The world’s most successful retailers have largely solved the challenge of providing online shoppers with an accurate site search, compelling images and product descriptions, fast fulfillment, and 24-hour customer support. But returns are still a major loss of revenue and an obstacle to creating value over the lifetime of the customer.
About 18% of online retail sales were returned in 2020, and 7.5% of those returns were fraudulent , according to the National Retail Federation and Appriss Retail.
That represents a $ 11.6 billion loss in cost of goods alone, according to an analysis by Signifyd. But fraud costs much more than just the cost of the stolen goods. A return triggers a chain of shipping, inspection, replenishment, or settlement costs.
In total, returns cost retailers nearly four times the cost of the products involved, meaning that returns cost merchants $ 584 billion per year, including $ 43 billion due to fraud, starting Signifyd calculations.
While it would be tempting to simply clamp down on returns across the board, retailers realize it would be unwise. In fact, 75% of consumers surveyed by Upwave on behalf of Signifyd said they are likely to stop buying from a brand because of a bad experience with a return. Additionally, around 58% indicated that they always carefully review a retailer’s return policy before making a purchase.
Simple and free returns are a requirement for merchants looking to be competitive. But the easier it is to return items, the easier it is for professional scammers and dishonest customers to take advantage of return policies.
“ When you don’t have protection or a security check, you make it clear to scammers and abusers that you are an easy target. It’s like word has gotten out and they’re telling all their friends and associates to attack Cuts, ”said Steven Borrelli, CEO of Signifyd’s consumer direct-to-consumer clothing brand Cuts .
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