Felipe Merlano

Purpose:

The expansion of online shopping aligned with challenging economic conditions have
contributed to increasing fraudulent retail product returns. Retailers employ numerous
interventions typically determined by embedded perspectives within the company (supply
side) rather than consumer-based assessments of their effectiveness (demand side). This
study aims to understand how customers evaluate counter-fraud measures on opportunistic
returns fraud in the UK. Based on the Fraud Triangle and the Theory of Planned Behaviour,
we develop an empirically informed framework to assist retail practice.



Design/methodology/approach:

We collected 485 valid survey responses about consumer attitudes regarding which
interventions are effective against different types of returns fraud. First, a principal
component section evaluates the policies' effectiveness to identify any policy grouping that
could help prioritise specific sets of policies. Second, cluster analysis follows a two-stage
approach, where cluster size is determined, and then survey respondents are partitioned into
subgroups based on how similar their beliefs are regarding the effectiveness of anti-fraud
policies.



Findings:

We identify policies relating to perceived effectiveness of interventions and create customer
profiles to assist retailers in conceptualising potential opportunistic fraudsters. Our product
returns fraud framework adopts a consumer perspective to capture the perceived
behavioural control of potential fraudsters. Results suggest effectiveness of different types of
interventions vary between different types of consumers, which leads to the development of
managerial implications to combat the fraud.



Originality/value:

This study is unique in assessing the perceived effectiveness of a range of interventions based
on data collection and advanced analytics to combat fraudulent product returns in
omnichannel retail.