Refund Fraud: What It Is, Common Types and How Merchants Prevent It

Refund fraud is a deliberate attempt to get a refund the customer is not owed. The fraudster lies about an order, returns something other than what was bought, or uses a chargeback threat to force a payout.

It is not rare. The National Retail Federation and Happy Returns put return fraud at 9% of all returns in 2025.

Sources: NRF and Happy Returns, 2025 Retail Returns Landscape; Mastercard (updated June 2026), first-party and third-party fraud combined; LexisNexis True Cost of Fraud Study, retail and ecommerce, June 2026.

The most common forms are friendly fraud (also called chargeback fraud), return fraud, wardrobing, item swapping and employee refund fraud. Chargeflow helps merchants recover the disputes that follow.

How refund fraud differs from related terms:

• Refund abuse is misuse of a refund policy that may not be clearly criminal, such as serial or exaggerated claims.
• Forced refund fraud is abuse of a merchant's own refund process. It needs a different investigation from a cardholder dispute.
• Digital shoplifting is keeping an online order while getting the money back through a false refund claim or chargeback.

Friendly fraud is when a cardholder disputes a valid purchase with a made-up reason to get their money back. Return fraud is different. Here the customer returns an item they did not buy, or a damaged item, for a full refund.

More cardholders now use chargeback threats to push merchants into refunds. Many owners give in to avoid a dispute and simply write off the sale.

This guide covers the main types of refund fraud, the red flags behind them and the refund fraud prevention steps that protect your business and your honest customers.

{{cta}}

Inzicht in terugbetalingsfraude: hoe fraudeurs verkopers oplichten

Before the types of refund fraud, it helps to know why refund fraud is so easy to commit. Online stores run on trust. Most merchants cannot quickly check if a refund request is real. The best long-term fix is to prevent chargebacks before they happen.

Here is a common pattern. A fraudster buys a product or service, then asks for a refund. The claim is usually "order not received" or "item not as described."

You may suspect a lie but approve the refund anyway, to keep the customer happy and protect your reviews. That gap is what fraudsters exploit. They get refunds for orders they received or items they damaged on purpose. Some even pay with stolen card details in the first place.

Fake IDs and throwaway email addresses make this easier online. A fraudster can request a refund and vanish, which makes them hard to trace. The same playbook also runs across web, app and store channels, which is why omnichannel fraud is hard to spot from one system alone.

Watch out for these refund fraud patterns and red flags so you do not become an easy target.

Types of Refund Fraud to Watch Out For

Spotting refund fraud is mostly pattern recognition. Learn these five types of refund fraud to limit revenue loss, damage to your brand and the risk of losing your processing account.

#1: Vriendschappelijke fraude

Friendly fraud happens when a customer disputes a valid charge with their card issuer. They often claim they did not approve it or that it was fraud. Tools like real-time chargeback alerts help catch disputes before they escalate.

Some customers file a dispute even after you refund them; see receiving a chargeback after a refund.

Hier zijn enkele cijfers:

• First-party and third-party fraud together made up around 45% of merchant chargeback volume worldwide in 2025, per Mastercard (updated June 2026, research by Datos Insights).
• Mastercard projects about 286 million chargebacks in 2026, with the global cost rising from $36.9 billion in 2026 to $46.1 billion in 2029.
• US retail and ecommerce firms lose about $5.13 for every $1 of direct fraud loss once fees, labor and lost goods are counted, per the LexisNexis True Cost of Fraud Study (June 2026).

These figures show why friendly fraud needs a defense plan, not just case-by-case refunds.

#2: Retourfraude

What is return fraud? Return fraud is a type of refund fraud in which a buyer returns a product they did not buy, or a broken product, for a full refund.

Common methods include:

• Changing or moving price tags
• Returning an item bought elsewhere for less
• Returning a different product than the one sold

Return fraud costs merchants money and can hurt their reputation. Automating chargeback recovery can win back revenue that would otherwise stay lost.

Honest mistakes cause returns too. But industry data shows return fraud is common. Take a look at the stats:

• The National Retail Federation and Happy Returns estimated that returns would total $849.9 billion in 2025, or 15.8% of annual sales.
• The same report puts return fraud at 9% of all returns.
• Some return fraud is run by organized retail crime groups, which the NRF calls a growing threat.

Source: NRF and Happy Returns, 2025 Retail Returns Landscape. Survey of 358 ecommerce professionals at US merchants with over $500 million in revenue.

Returns peak after the holidays. See holiday return and refund fraud for a refund-or-fight decision table, policy wording and the evidence to keep.

#3: Wardrobing

Wardrobing is when a shopper buys a product, uses it for a short time, then returns it for a full refund. Clothing is the classic case. The buyer wears it, then says it did not fit or was not right.

Wardrobing is a form of first-party fraud. It costs sales and strains the supply chain, because used items cannot be resold at full price.

Hier zijn enkele cijfers:

• Close to two-thirds of consumers admit to at least one costly returns habit, including wardrobing and "bracketing" (buying several sizes to return most of them).
• 45% of consumers say "bending the truth" is acceptable when returning items.
• Shoppers aged 18 to 30 made 7.7 online returns on average over 12 months, more than any other age group.

Source for all three: NRF and Happy Returns, 2025 Retail Returns Landscape (survey of 2,006 US consumers, summer 2025).

#4: Fraude met terugbetalingen door werknemers

Employee refund fraud is when a staff member abuses access to the refund or return system for personal gain. They may create fraudulent refunds or push through returns without approval. A structured approach to chargeback management keeps disputes under control.

The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5% of annual revenue to occupational fraud. It classes fake refunds as a register disbursement scheme. Its 2024 Report to the Nations found a median loss of $145,000 per case across 1,921 cases.

Three controls stop most employee refund fraud:

• Refund approval limits, with a second sign-off above a set amount
• Audit logs that tie every refund to an order and a staff login
• Regular reviews of refunds issued per employee

#5: Voorwerpen ruilen

Item swapping is a form of return fraud. The customer buys an item, swaps it for a cheaper or older one, and returns the swapped item for a full refund. They keep or resell the better product.

Common swaps include:

• Returning an older item they already own in the new item's box
• Buying a similar-looking item and moving the tags or packaging
• Using the new item for a while, then returning a cheaper copy

Electronics are a frequent target, because the original packaging is hard to fake.

Item swapping is hard to catch when the swapped item has the same size and weight. It is also costly. The merchant must sell the swapped item at a discount or pay to dispose of it.

See the full chargeback fraud prevention guide for a checklist.

Welke gevolgen heeft terugbetalingsfraude voor bedrijven?

Refund fraud causes direct losses, harms the brand and creates extra work. It hits on several fronts:

• Profit: fraudulent refunds drain cash and margin, which hurts small businesses on thin budgets most.
• Trust: frequent refund fraud erodes customer trust and costs future sales.
• Honest customers: it leads to stricter return rules and longer wait times for everyone.
• Prices: businesses pass fraud costs on through higher prices or fewer products.

Those higher prices cut buyers' purchasing power. Some shoppers turn to less suitable options. At a wider level, refund fraud also:

• de marktefficiëntie vermindert,
• verstort de bevoorradingsketens, en
• results in the loss of jobs and tax revenue.

Preventing refund fraud is a balancing act. Retailers who push too hard face a backlash. Asos made headlines in April 2019 when it tightened its returns policy. Many customers were offended by its warning: "if we notice an unusual pattern, we might investigate and take action."

The next section covers prevention steps you can apply right away. The wider goal is to prevent eCommerce chargebacks across the store.

Tips om terugbetalingsfraude te voorkomen

Refund fraud prevention works best in layers. No single control stops every scheme, so match each control to the fraud type it blocks. The standard checklist for preventing refund fraud is:

1. De identiteit van klanten controleren
2. Geef medewerkers training over fraudepatronen
3. Zorg voor een transparant beleid inzake terugbetalingen
4. Stel een uitgebreid plan voor fraudepreventie op
5. Gebruik geavanceerde technologieën voor fraudedetectie en -beperking
6. Gebruik retourlogistiek om de kwaliteit van transactieprocessen te waarborgen

These tactics fit into a broader ecommerce fraud prevention strategy that covers threats beyond refunds alone. To act earlier, learn how to detect return and refund abuse before shipping an order.

How do you prevent refund fraud without hurting the customer experience?

Apply friction only where risk is high. Keep instant refunds for customers with a clean order history. Hold refunds for first-time buyers, high-value items and accounts with past claims until the return is inspected.

Write the rules into your policy so honest buyers know what to expect. Then improve your return policy with clear time limits, condition rules and proof requirements.

Should you refund or fight a suspected refund fraud claim?

• Refund when the amount is small, the customer has a clean history and you lack evidence.
• Fight when you have delivery proof, usage data or intake photos that contradict a friendly fraud or return claim.
• Do not refund under threat if a chargeback is already filed. A refund at that point can lead to a double loss.

{{cta}}

After that due diligence, automate your disputes with Chargeflow so you can recover any chargeback a fraudster forces on you. A refund is also not the same as a reversal; know the difference between a refund and a reversal transaction before you act.

Chargeflow helps merchants stop refunding legitimate orders out of fear of chargebacks. It lets you assess transaction risk quickly, spot likely fraud and act early.

With Chargeflow's success-based pricing, you only pay when you win.