Retailers are being warned that the drive to process refunds quickly could be increasing their exposure to returns fraud, with new analysis identifying significant variations in suspected fraudulent activity across European markets.
Data from ReBound Returns, based on millions of returned items, found Poland recorded the highest average rate of potentially fraudulent returns at 10%, equivalent to one in every 10 items.
The Isle of Man followed at 8%, while Hungary and Greece both recorded rates of 7%.
The scale of the potential financial exposure increases rapidly for larger retailers. ReBound estimates that a fashion retailer generating £100 million in annual sales, with a 20% return rate and 5% fraud rate, could lose £1 million annually to fraudulent returns.
For a large omnichannel retailer operating at the same fraud rate, projected losses rise to £3.5 million. At enterprise level, a retailer with £960 million in sales and a 7% returns fraud rate could potentially face losses of £20 million a year.
Separate ReBound analysis of one million returned orders processed between July 2025 and May 2026 identified £29 million of potentially fraudulent returns.
Liselotte Reijrink, Sales Director UK & EU at ReBound Returns, said pressure to refund customers rapidly had encouraged a “refund first, ask questions later” approach that can leave retailers exposed.
However, simply making returns policies more restrictive could also create problems by inconveniencing legitimate customers and potentially damaging loyalty.
Reijrink argues that fraud prevention therefore needs to become more sophisticated at the point a return is initiated.
Combining behavioural analysis and risk scoring with physical verification and connected cross-channel data could enable retailers to identify suspicious returns before refunds become losses, she said.
International transactions present an additional challenge, particularly where retailers lack local warehouses or verification hubs and returned products must cross borders before they can be inspected.
While geographic fraud rates can provide another useful risk signal, ReBound cautioned against relying on location in isolation because patterns can change significantly over time.
The findings reinforce the case for risk-based returns processes capable of distinguishing suspicious behaviour from legitimate customer activity – allowing higher-risk transactions to receive additional scrutiny without introducing unnecessary friction across every return.
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