Return Fraud Is Rising. E-com Sites Are Done Playing Nice

Rising cases of product swaps, fake accounts for refunds are costing firms thousands of crores

- Sowmya Ramasubramanian

A designer dress is returned—only it's been swapped for a used T-shirt. In another case, fraudsters created fake accounts and dummy addresses to claim ₹1.1 crore in refunds from Myntra, without returning a single product. These aren't isolated incidents. E-commerce platforms say they're part of a fast-growing pattern of return fraud that's costing the industry thousands of crores.

As fraudulent claims surge, platforms are rethinking their once-liberal return policies—an issue that's quietly eating into margins and prompting course corrections across the industry. While genuine returns remain a core part of the online shopping experience, platforms say deliberate misuse—through false delivery claims or product swaps—is rising fast.

According to Vanita Pandey, chief marketing officer at global compliance and fraud prevention firm Bureau, Indian e-retailers lost as much as ₹15,000 crore ($1.8 billion) to e-commerce fraud in FY24, a category that includes return-related abuse among other forms of digital fraud. More recent data was not available.