Report Overview
Flexible return policies were built to earn customer trust. Today, they’ve become one of the biggest profit drains in eCommerce.
What began as a loyalty driver is now a costly vulnerability. Wardrobing, counterfeit returns, and refund scams cost retailers billions in lost inventory, shipping, and restocking fees—and the problem is growing.
Nearly half of merchants now embed fraud signals into return workflows, and 90% want those capabilities delivered through integrated platforms, not standalone tools. Yet progress remains slow. Eighty percent cite margin pressure as a barrier to adopting AI, while 67% hesitate to tighten controls for fear of hurting retention.
The priority has shifted. Returns can build loyalty, but unchecked abuse turns them into a liability. Protecting margins and customer trust now requires automation, unified data, and adaptive, risk-based policies.
The 2025 Link Index for Returns Abuse in eCommerce gives finance, fraud, and customer service leaders a clear benchmark of who’s solving these challenges. We evaluated leading vendors across automation, compliance alignment, data quality, and ease of implementation. The strongest platforms stood out for unifying fraud detection, case management, and behavioral analytics into one cohesive system.
Key Takeways:
- Limited AI adoption constrains progress: 80% of organizations cite margin pressure as the main barrier to deploying advanced AI in return management.
- Policy hesitation slows prevention: Only 52% are willing to adjust return policies, even as returns fraud is projected to rise 9% in four years.
- Data silos weaken visibility: 66% report difficulty sharing return and refund data, and 55% cite stronger collaboration as the top benefit of solving these gaps.
- Customer experience still drives resistance: 67% hesitate to adopt stronger fraud controls due to fear of alienating legitimate customers.
- Platform adoption is the future: 90% of merchants prefer platform-based returns solutions, with unified case management and AI-driven analytics leading investment priorities.
Methodology
The Link Index offers a detailed analysis and ranking of leading vendors for specific use cases, leveraging robust data and insights from Liminal’s market and competitive intelligence platform, Link. Liminal’s research team invites solution providers to participate in a company survey and analyst briefing. It uses a proprietary framework to assess and rank product capabilities based on their relevance to market needs. Liminal’s Digital Identity Landscape taxonomy and ontology are central to the Link Index, which precisely evaluates vendor solutions by buyer demand, product capability, and market presence. Liminal conducts a rigorous survey among buyers in the vendor selection process to identify the most in-demand product capabilities and the most valued product components. Market presence criteria included buyer satisfaction, market penetration, and brand recognition. The Link Index was designed to be used to inform go-to-market strategy and execution and provide guidance for solution buyers, specifically:
- Executives in corporate strategy
- Leaders of go-to-market execution
- Practitioners of solution implementation
Customer
Access
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Contributors
Travis Jarae
CEO
Jennie Berry
President
Stacy Beddoes
Chief Marketing Officer
Joe Stuntz
Principal
Cameron D'Ambrosi
Senior Principal
Coby Friedland
Associate
Vivaan Jaikishan
Associate
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