The phenomenon of online shopping has exploded, leading to an unprecedented increase in the volume of product returns. Industry estimates indicate that retail returns are expected to reach an astounding $1 trillion by the end of this year. While this surge in returns presents operational and financial challenges, the growing trend of fraudulent return activities compounds the issue further. Fraudulent claims, such as reporting items not received and returning used or damaged goods, constitute a financial drain for retailers. With over 15% of these returns deemed fraudulent, in 2024 alone, retailers faced more than $103 billion in losses. Into this challenging landscape enters Shield, an advanced AI-powered returns management and fraud prevention solution developed by Narvar.
AI-Powered Fraud Detection and Management
Narvar’s Shield harnesses the power of its proprietary IRIS™ technology, an AI intelligence layer capable of processing a staggering 42 billion consumer interactions annually. This level of data analysis allows Shield to detect fraudulent activities in real time, transforming how retailers manage returns. Intelligent return and exchange workflows combined with fraud detection mean that retailers can now differentiate between high-trust customers and potential fraudsters at the moment of a return request. This real-time capability is crucial, enabling hyper-personalized return, exchange, and refund options, thereby driving customer loyalty while effectively preventing fraudulent returns and enforcing eligibility rules.
The introduction of automated exchange options by Shield represents another significant advancement. Support teams, often overwhelmed with “Where is my refund?” calls, can now breathe easier. This reduction in operational burdens comes from the AI’s ability to manage and automate exchange options, ensuring that genuine customers have their returns and refunds processed swiftly while fraudulent activities are nipped in the bud. By identifying repeat fraudulent behaviors and enforcing dynamic return policies, Shield addresses various types of return fraud, including empty box scams, cross-retailer fraud, and wardrobing. Loyal customers benefit from more flexible return options, such as instant refunds and seamless exchanges, further enhancing their shopping experience.
Substantial Retailer Impact and Early Adoption
Retailers using Shield have reported significant benefits. Early adopters like American Eagle and Estée Lauder have seen impressive results in preserving revenue and improving operational efficiency. These companies have experienced an 18% increase in revenue protection due to stringent eligibility enforcement. Moreover, revenue retention from exchanges has shot up by 40%, while savings on reverse logistics costs have increased by an astonishing 40%. Additionally, these retailers have observed a 50% reduction in call center costs, highlighting how Shield helps streamline customer service operations. These statistics underscore how Shield delivers measurable improvements in safeguarding revenue, reducing operational costs, and enhancing the overall customer experience.
The benefits of Shield go beyond merely reducing fraud; they contribute significantly to customer satisfaction. By leveraging AI to personalize return policies and streamline return processes, retailers can build stronger relationships with their customers. This approach fosters customer loyalty and trust, which are essential components of long-term business success. Furthermore, minimizing fraudulent activities helps to preserve retailer margins, allowing for reinvestment in areas that drive growth and innovation. The dual advantage of preventing fraud while enriching customer experience sets Shield apart as a comprehensive solution in the rapidly evolving retail landscape.
Expanding Protection with Shipping Protection1
Alongside Shield, Narvar has also introduced Shipping Protection1, developed in partnership with InsureShield® Shipping Insurance, to address the escalating issues of lost, stolen, or damaged deliveries. This innovative solution allows shoppers to add package protection at the checkout stage, thereby shifting the risk to a third party. This not only provides peace of mind but also ensures a smoother checkout experience for customers. The provision of a self-service portal for filing and managing claims further reduces the burden on customer support teams and protects retailer margins.
The integration of Shipping Protection1 highlights the comprehensive approach Narvar takes towards enhancing retail operations. By addressing not just returns but also delivery issues, Narvar aims to provide end-to-end solutions that safeguard both retailer and customer interests. This holistic view ensures that retailers can offer a seamless shopping experience that addresses potential pain points at every stage of the purchase cycle. Implementing Shipping Protection1 also empowers customers to have more control over their post-purchase experiences, fostering a sense of trust and reliability in the retailer’s services.
Conclusion: The Future of Retail Return Management
The rise of online shopping has caused a massive spike in product returns, with the industry predicting retail returns to hit a staggering $1 trillion by year’s end. This boom in returns creates significant operational and financial hurdles for businesses, but the situation is exacerbated by the rise in fraudulent returns. Scams like falsely claiming items weren’t received or returning used and damaged goods significantly hurt retailers financially. With over 15% of returns considered fraudulent, retailers incurred over $103 billion in losses in 2024 alone due to these activities. Amidst these challenges, Shield emerges as a game-changing solution. Developed by Narvar, Shield is an advanced AI-powered system aimed at managing returns and preventing fraud. Its sophisticated technology offers retailers a way to combat the growing issue of fraudulent returns, enhancing efficiency and protecting their bottom line. Shield stands as a critical innovation in navigating the complexities of modern retail returns.
