What is receipt fraud?

Receipt fraud refers to a type of fraudulent activity where individuals exploit the return policies of retailers by returning purchased items without providing the necessary proof of purchase, such as a receipt. This practice can lead to significant financial losses for retailers, as it undermines the integrity of their return policies designed to protect against theft and fraud. Customers engaged in receipt fraud may have obtained items through legitimate means but then attempt to return them under fraudulent pretenses, often resulting in the retailer losing both the product and the sale value.

This phenomenon can manifest in various forms, such as individuals returning stolen merchandise, using counterfeit receipts, or returning items bought on sale at full price, effectively manipulating the system for personal gain. Understanding receipt fraud is crucial for retailers seeking to implement strategies that mitigate this risk and secure their revenue streams.