The 2026 operator guide
Return fraud on Shopify: what it is, what it costs, how to stop it.
By Adrien Bokor, founder of RefundSentry · Last reviewed
Most refunds are honest. A few customers take refunds again and again, and some open a new account each time, so they look like strangers. This guide covers the nine patterns Shopify stores see, how to tell each one from an ordinary return, and what you can check before the next refund goes out.
$103Blost by US retailers to fraudulent returns and claims in 2024, on $685 billion of returned merchandise.Appriss Retail and Deloitte, 2024
Nearly 1 in 4dollars claimed in refunds was abusive, across more than a million refund requests.Riskified, January 2026
15.14%of all US returns were fraudulent in 2024. Retailers in NRF's 2025 study estimate 9%.Appriss Retail and Deloitte; NRF
For evidence from one store, read our 2026 study of 73,000+ orders from one Shopify store.
Definition
What is return fraud?
Return fraud is getting a refund or a replacement you are not entitled to under the store's return policy: returning an item worn once, an empty box, a claim that a delivered parcel never arrived, a chargeback on an order you kept. Each one ends in the same place on your books: the money refunded, the goods gone or unsellable, and often a fee.
Return fraud vs return abuse vs legitimate returns
The line is intent, and how clearly the policy was broken. A legitimate return is the system working: wrong size, changed mind, done. Return abuse bends a generous policy without being plainly criminal: six sizes ordered every month and nearly all sent back, a worn dress with the tag put back on, every order returned at the end of the window. Return fraud is plainly criminal: empty boxes, switched serial numbers, false delivery claims, fake receipts.
Appriss Retail's 2026 study puts numbers on the split. Of the $706 billion of merchandise returned in 2025, $100 billion (14.2%) was preventable loss from fraud and abuse, most of it abuse: 12% against 2% for outright fraud. Most of the money you can save sits in the abuse, where a clear policy and a look at who is behind the refunds do the work.
The scale
How big is the problem actually?
Two respected studies give two different headline numbers. Both are right: they measure different things.
- Appriss Retail and Deloitte, 2024
- 15.14% of all US returns were fraudulent in 2024: $103 billion lost, on $685 billion of returned merchandise. The figure counts fraudulent returns and claims. The Appriss Retail release
- NRF and Happy Returns, 2025
- 9% of all returns are fraudulent, retailers estimate. Returns for 2025: $849.9 billion, 15.8% of retail sales. The NRF release
Riskified, January 2026, more than a million refund requests. Nearly 1 in 4 dollars claimed was abusive. Item-not-received claims were 25% more likely to be fraudulent than missing-item reports. Claims filed within the first seven days were over 20% more likely to be abusive. Orders above $1,000 were 33% more likely to draw an abusive claim, and orders above $2,000 had claim rates 2.5 times those of orders under $100. The Riskified release
$4.61the full cost to US merchants of every $1 of fraud.LexisNexis True Cost of Fraud, 2025
24.5% / 8.7%the online return rate against the in-store one in 2024.Appriss Retail and Deloitte, 2024
47%of shoppers said they had returned items with the tags removed, and 32% a worn item.Happy Returns and NRF survey
The patterns
The nine patterns Shopify operators actually see
Nine patterns, each with its own signs. Many people who abuse returns use more than one. For each, what you can check yourself, and what RefundSentry sees in your orders and refunds. It does not see what is inside a box.
01 / 09
Wardrobing
Buy, wear once, return as new.
A dress for a Saturday event comes back on Monday with the tags put back on. On its own it reads like any return that did not fit, which is what makes it hard: the proof is on the item, not in the order. In Appriss Retail and Deloitte's 2024 study, 60% of retailers reported wardrobing.
What you can check
- Inspect the item before you refund: wear, marks, smells, tags put back on.
- Look at the customer's other refunds, under every account they use.
What RefundSentry sees
- Not the item: it cannot tell a worn dress from a new one.
- How often the same person has been refunded, across the accounts linked to them.
02 / 09
Bracketing abuse
Order several sizes, keep one, return the rest, again and again.
Ordering two sizes to find the right one is normal, and common: in a Happy Returns survey, 51% of Gen Z shoppers said they bracket, against 24% of baby boomers. It turns into abuse when a customer keeps almost nothing, order after order, and every return costs you shipping, handling and resale.
What you can check
- Several sizes or colors of one item on the same order.
- How much each customer keeps of what they order, over several orders.
What RefundSentry sees
- Every order and refund of the customer over up to 12 months, and of the other accounts linked to them.
03 / 09
Empty-box and switch returns
The box comes back. The product does not.
An empty box, a box weighted with something else, or an older item in place of the one you sent. Of the retailers in NRF and Happy Returns' 2025 study that track it, 65% saw more empty-box returns. When the refund goes out at the carrier scan, the money is gone before anyone opens the parcel.
What you can check
- Refund after inspection, not at the carrier scan.
- Weigh the return against the weight you shipped.
- Check serial numbers on electronics.
What RefundSentry sees
- Not the parcel: it cannot see inside a box.
- Whether the person behind the return has been refunded before, under this account or another one linked to it.
04 / 09
INR fraud
The parcel was delivered. The customer says it was not.
An item-not-received claim asks for a refund on a parcel the carrier marked as delivered. Riskified's January 2026 analysis found these claims 25% more likely to be fraudulent than missing-item reports, and claims on orders above $1,000 33% more likely to be abusive. When the claim becomes a chargeback, the carrier's proof of delivery is what you answer with.
What you can check
- The carrier's delivery scan, and a photo or signature when there is one.
- Earlier never-arrived claims by the same person, or at the same address.
What RefundSentry sees
- Each refund and chargeback where the buyer said the parcel never arrived.
- For a never-arrived chargeback on a Shopify Payments order with tracking, the carrier's proof of delivery, ready for the dispute.
05 / 09
Refund fraud
A false damage claim, a fake receipt, a switched price.
The classic version: a receipt you never printed, a price tag swapped, damage photos reused from one claim to the next. In Appriss Retail and Deloitte's 2024 study, 48% of retailers reported returns with counterfeit receipts or e-receipts. Online it usually arrives as a run of damaged-on-arrival tickets.
What you can check
- Search the damage photos: the same picture on two claims is no accident.
- Refunds asked for with no item coming back.
What RefundSentry sees
- The refunds and their amounts, per person across the accounts linked to them.
- Not photos or receipts: it does not read them.
06 / 09
Friendly fraud and chargeback abuse
The customer gets the order, then disputes the charge.
Also called first-party misuse: a buyer who received the order asks the bank for the money back. On Shopify Payments each chargeback also costs a fee, $15 in the US, returned only if you win, and Visa counts every dispute toward a store's ratio, won or lost.
What you can check
- Proof of delivery.
- The buyer's earlier orders that were never disputed.
What RefundSentry sees
- Each Shopify Payments chargeback, with an evidence pack prepared for the dispute: the carrier's proof of delivery when the buyer says it never arrived, and the linked accounts in counts and dates.
- The bank decides the dispute. The pack is your side of it.
07 / 09
Double-dip (return plus chargeback)
Same order, refunded twice.
The customer is refunded, then disputes the same order weeks later. If the bank sides with the buyer, you pay twice: the refund, then the chargeback and its fee.
What you can check
- Before you answer any dispute, check whether the order was already refunded, and put the refund in your answer.
What RefundSentry sees
- Every order that was both refunded and disputed, whichever came first.
- A refund proof for the evidence pack, so the bank sees the money already went back.
08 / 09
Coordinated low-ticket waves
Many small orders from new accounts, returned the same way.
A burst of low-value orders from accounts that look unrelated, each returned within days for the same reason. Each refund is too small to notice. Together they are often one person, or one group.
What you can check
- A spike of returns on one product.
- The same return reason, in the same words, across different customers.
What RefundSentry sees
- Accounts that share a card, a browser, an address written differently, or a device or connection, grouped so you see them as one.
09 / 09
Discount stacking and repeat refunders
Return, wait for the sale, buy again for less.
A small group of customers takes a large share of the refunds. Some wait for a discount, return the full-price order and buy it again. Some open a second account to use a one-per-customer code twice.
What you can check
- Customers refunded again and again.
- Discount codes used by several accounts that ship to one address.
What RefundSentry sees
- Repeat refunds per person, across every account that shares a card, a browser, an address, or a device or connection with them.
Detection
How to detect return fraud on Shopify before you refund
Detection on Shopify works at three levels: the order, the customer, and the person behind the customer's accounts. A checkout fraud tool works on the first. Repeat refunds only show at the other two.
At the order layer
RefundSentry checks every new order as it comes in and writes its verdict into the order's risk panel in Shopify, from the start; you can switch that off in Settings. An order is held before it ships only when you blocked the customer or switched on a rule that holds it. A new rule starts paused, and shows what it would have matched on your history before you switch it on.
At the customer layer
A customer's history is where repeat refunds show: every order, refund, return and chargeback over up to 12 months, with a suggested refund method for each return from the start. Put a customer on your watch list and their next orders come to Needs review with an email; nothing is held. Block them and their next orders are held before they ship.
Every order, return and refund gets a risk score from 0 to 100, in a low, medium or high zone.
RefundSentryHeld by RefundSentry
Check this order before you ship it.
- Paid with the card ending 4417, used on 5 accounts you blocked
- Placed from the browser 6 of those accounts used
- [email protected] is [email protected] with a +tag
Why it is held: card of a blocked customer, browser of a blocked customer. You release it or cancel it.
Across accounts
The customer who looks new may be the same person as several others. RefundSentry links accounts only by what they really share: a card, a browser, an address written differently, a device or connection, or the exact same email once a +tag or the dots in a Gmail address are set aside. Never by emails that only look alike.
It reads your own store's history. It does not compare your customers with other stores'. What links two accounts
Links /
One card, one browser, one address
7 accounts share them: 9 orders from Jan 9 to Aug 27, 2026. Most ship to 12 Elm St, Tacoma WA, written 3 ways.
Card ****4417Browser12 Elm StConnection
RefundSentry suggests High confidence
One person or a group?
7 accounts share a card, a browser, an address or a connection.
Your note Needed to confirm or dismiss
If you confirm: you can block all 7 in one step. Nothing happens in Shopify until you block.
If you dismiss: they keep ordering, and RefundSentry stops raising this group.
Shopify Payments
How return fraud quietly kills your Shopify Payments account
Return fraud does not stop at the refund. When it turns into chargebacks, it raises the dispute rate that Shopify and the card networks watch.
- Shopify Payments
- No published threshold. Shopify says it holds stores to a higher standard than the card networks' thresholds, and it can hold part of your payouts in a reserve when it sees more risk. Each chargeback costs $15 in the US, returned if you win.
- Visa VAMP
- 1.5% since April 1, 2026, down from 2.2%, in the US, Canada, Europe, Asia Pacific and Latin America. The ratio adds fraud reports and disputes over card-not-present sales, and counts a merchant from 1,500 a month. Each counted case costs $8.
- Mastercard ECM
- From 100 chargebacks a month and a rate of 1.5%. Its high tier starts at 300 and 3%.
The double dip is the quickest way to a threshold: a customer is refunded, then disputes the same order. Without an answer that shows the refund, the store pays twice, and Visa counts the dispute toward the ratio either way. Shopify Protect reimburses only fraudulent and unrecognized chargebacks on eligible US Shop Pay orders, so it does not cover a buyer who says the parcel never arrived.
Shopify chargeback rate benchmarks · The real cost of a chargeback · Chargeback prevention for Shopify
The stack
The four-layer app stack for return fraud on Shopify
No single tool catches every pattern. Each layer owns a different moment of the order, from checkout to the dispute.
| Layer | Tools | Catches | Misses |
|---|---|---|---|
| Payment-time fraudLayer 1 | Shopify fraud analysis, the Fraud Control app, Shopify Protect | Stolen-card fraud at checkout. Built into Shopify. | What happens after delivery: repeat refunds, returns abuse, never-arrived claims, chargebacks on delivered orders. |
| Returns managementLayer 2 | Loop Returns, AfterShip Returns, ReturnGO | Your policy in the return portal: the window, the reasons, the fees. | The person behind many accounts. Chargebacks. |
| Return-fraud intelligenceLayer 3 | RefundSentry | Repeat refunds, the accounts behind one person, orders refunded and then disputed, evidence packs for chargebacks. | Checkout decisions and the return portal: it works beside both. |
| Chargeback recoveryLayer 4 | Chargeflow, Justt | Disputes after they land: the answer to the bank. | Stopping the dispute before it is filed. |
Most stores need the first layer, which Shopify includes; a returns app if they take many returns; and the third layer once repeat refunds show up. RefundSentry sits in the third, beside the others: it does not replace your returns app or your checkout fraud protection.
RefundSentry beside these tools, question by question · Shopify's own tools, compared
Questions
Return fraud, answered
What is return fraud?
Return fraud is misusing a store's return or refund process to get money or goods you are not owed: returning a used, different or empty item, claiming a delivered parcel never arrived, or disputing a charge after receiving the order. Appriss Retail and Deloitte found 15.14% of US returns in 2024 were fraudulent, a $103 billion loss for retailers.
What is the difference between return fraud and return abuse?
Return fraud is plainly criminal: fake receipts, stolen goods, empty boxes, false delivery claims. Return abuse bends a generous policy without being clearly criminal: wearing and returning, ordering many sizes and keeping almost none, returning past the spirit of the policy. In Appriss Retail's 2026 study, abuse made up most of the preventable loss on returns: 12% against 2% for outright fraud.
How common is return fraud in 2026?
The studies differ because they measure different things. Appriss Retail and Deloitte put fraudulent returns and claims at 15.14% of US returns in 2024. In NRF and Happy Returns' 2025 study, retailers estimate 9% of returns are fraudulent. Riskified's January 2026 analysis of more than a million refund requests found nearly 1 in 4 dollars claimed was abusive.
How much does return fraud cost retailers?
$103 billion for US retailers in 2024, in Appriss Retail and Deloitte's study. LexisNexis's 2025 True Cost of Fraud study puts the full cost to US merchants at $4.61 for every $1 of fraud.
What is the most common type of return fraud?
In Appriss Retail and Deloitte's 2024 study, 60% of retailers reported wardrobing: buying an item, using it and returning it. In NRF and Happy Returns' 2025 study, 65% of the retailers who track it saw more empty-box returns. Online, item-not-received claims matter most: Riskified found them 25% more likely to be fraudulent than missing-item reports.
Is bracketing return fraud?
No. Ordering two or three sizes to find your fit is normal: 51% of Gen Z shoppers said they bracket in a Happy Returns survey. It becomes abuse when it is systematic and costly, a customer who keeps almost nothing, order after order. A good policy targets that customer, not the practice.
How do I detect return fraud on Shopify?
Use three things together. Shopify's fraud analysis rates each order for fraud at checkout. A returns app runs your policy in the return portal. A return-fraud app like RefundSentry reads your refunds and chargebacks after the order and links the accounts behind them by a shared card, browser, address, device or connection, or the exact same email. It also shows the orders that were refunded and then disputed, and prepares the proof of delivery for never-arrived chargebacks on Shopify Payments.
What happens to my Shopify Payments account if my chargeback rate exceeds 1%?
Shopify does not publish a chargeback rate that triggers action. It says it holds stores to a higher standard than the card networks' thresholds, and it can hold part of your payouts in a reserve when it sees more risk. The card networks do publish theirs: since April 2026, Visa's VAMP counts a merchant at a 1.5% ratio and 1,500 fraud reports and disputes a month, and Mastercard's ECM program starts at a 1.5% rate and 100 chargebacks a month.
Primary sources cited on this page
- Appriss Retail and Deloitte, 2024 Consumer Returns report
- NRF and Happy Returns, 2025 Retail Returns Landscape (press release)
- Riskified, refund abuse analysis, January 2026
- LexisNexis Risk Solutions, True Cost of Fraud study 2025
- Appriss Retail, 2026 Total Retail Loss report
- Happy Returns and NRF, consumer returns survey
- Shopify Help: the chargeback process and fees
- Shopify Help: reserves on Shopify Payments
- Shopify Help: Shopify Protect
- Stripe: card network dispute monitoring programs (Visa VAMP, Mastercard ECM)
Last reviewed 27 September 2026. Every figure is from the study linked above it; check the source before quoting it. Disclosure: RefundSentry sells return-fraud software for Shopify, so we have a stake in how the third layer is described.
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