Not all bad returns are the same. Distinguishing between fraud and abuse helps merchants apply the right strategies — preventing outright deception while still protecting the customer experience.

Fraud

Fraudulent returns involve blatant deception. The customer does not return the expected item, and the merchant incurs a full financial loss — both the item and the refund are gone.

Examples include:

• Empty box returns: Buyer returns packaging without the product inside
• Fake or wrong item returned: Buyer sends back a counterfeit or something else entirely
• Stolen goods: Buyer returns goods obtained through fraudulent transactions
• Label manipulation (FTID): Buyer fakes tracking to simulate a return
• Partial item return: Buyer returns only part of the order but requests full reimbursement

In these cases, Signifyd classifies the return as FRAUD and recommends full denial or recapture strategies. Returns labeled as fraud also inform future model scoring and chargeback defense.

Abuse

Abusive returns are technically compliant — the item is returned — but the buyer misuses your return policy. The result is increased cost, operational burden, and often unsellable merchandise.

Examples include:

• Wardrobing: Buyer uses the item, then returns it as “new”
• Bracketing: Buyer orders multiple sizes/colors with intent to return most
• Loyalty or appeasement abuse: Buyer repeatedly leverages policies for free returns or refunds
• Reseller returns: Buyer offloads unsold inventory via your returns process

Signifyd classifies these as ABUSIVE. You still receive the item back, but the experience undermines profitability and opens the door to broader policy abuse.