Retail loss prevention executives anticipate that nearly nine percent (8.93%) of holiday returns will be fraudulent, up slightly from 8.67% last year, according to a National Retail Federation survey.

As a result, return fraud will cost retailers an estimated $3.7 billion this holiday season, up from $3.5 billion last year. Retailers will lose $10.8 billion to return fraud in 2007, the survey found.

Despite the prevalence of fraud, 35% of retailers have stated they made their return policies more lenient during the holidays to accommodate holiday shoppers. Common practices include retailers extending the amount of time for returns to be made and also being more flexible to customers without a receipt.
According to the survey, 92% of retailers have had stolen merchandise returned to stores within the past year. Retailers also report being victimized by returns of merchandise originally purchased with fraudulent or stolen tender (83.1%) and returns using counterfeit receipts (51%).

The survey polled 60 retail loss prevention executives last month.