Latest News

How Point of Sale Software Can Help Prevent Return Fraud

September 10, 2015

Return fraud can be a huge problem for retailers. The National Retail Federation estimated that it costs almost $9.6 billion across the industry every year, and they found that roughly 9% of returns are fraudulent. Luckily, the implementation of newer and smarter POS systems help retailers protect against return fraud.

Track Return Data

Using your point of sale system to track return stats is a way to identify whether the return fraud trend is growing at your store. Look for features that let you see overall return statistics. If you notice that your return rate grew within the last few years, and that it’s getting harder to resell merchandise that was returned, you may have a problem. Unfortunately, many fraudulent returns can be traced back to individual employees; however, POS systems track manual override returns made without receipts, which can tip you off to employee theft. Many point of sale systems even let you track individual employee behavior, so you can see if any particular employees have an alarmingly high return average.

Digitalize Receipts

Most fraudulent returns happen because an item is stolen from the store and then returned, and the return money is transferred to a card that was never used in the first place. POS-generated digital receipts completely eliminate this from happening. They allow employees to access customer receipts when the customer doesn’t have one so they can verify the purchase and method of payment before issuing a refund or exchange. They also cut out the opportunity for thieves to use fake receipts. Obviously, if their receipt doesn’t match the digital version, something is off.

Monitor Customer Behavior

People who buy merchandise, use it, and return it the next day commit one of the most common types of return fraud. Many POS systems offer features that track customer purchases instantly, so your associates can see the customer’s previous purchases and evaluate for a potential history of “renting” products from your store.

By using your point of sale system to protect your store from return fraud, you can make your return policies a bit more lenient and less restrictive. In turn, this affects your sales, customer buying confidence, and customer satisfaction.

What Can You Expect from TallySales? Download our Complete POS Guide to TallySales Retail Management Suite


311 South Central Avenue
Canonsburg, PA 15317
United States
1-888 TallySoft (825-5976)
Phone: (724) 873-5264
Fax: (724) 873-5265