Artificial Intelligence Can Help Detect and Prevent Return Fraud
Predictive analytics can be retailers’ secret weapon against return fraud. Artificial intelligence tools can analyze customer behavior, establishing standard, nonfraudulent patterns of use as well as fraudulent use patterns so retailers can craft policies that minimize the risk of return fraud without burdening good-faith customers. Once a behavior is identified as potentially fraudulent, retailers can direct customers who display that behavior to payment methods that minimize opportunities for return fraud.
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Analytics software can detect anomalies, including those indicative of fraud. One nonfraud example illustrates the capabilities of real-time analytics software: When a grocery store cashier accidentally entered the PLU code for avocados (4046) as the quantity of avocados, the cashier initiated a return to correct the mistake. Analytics software caught the issue, saving the retailer more than $8,000.