Return Fraud vs. Return Abuse in 2026: How Jesta Helps Stores Tell Them Apart | Jesta I.S.

January is when the returns counter gets busy. Gifts come back, online orders come back to stores, and associates have a few seconds to decide whether a return is routine, a customer stretching the policy, or deliberate fraud.

That decision is harder than it used to be. Many returns now start online and end in a store, so the associate may have one receipt, a different card or no receipt at all, and little view of the full transaction history. Treat every return as suspicious and you lose good customers. Treat none as suspicious and the losses add up quietly, store by store.

The answer is not a stricter counter. It is a better-connected one: clear rules for what deserves a second look, a way to investigate the exceptions, and data that confirms sales, returns, tenders and inventory still agree once the day is done.

Where Jesta Fits: One Platform, Three Controls

Jesta’s Omni Store Platform is a unified commerce platform that harmonizes in-store and digital processes and data for real-time visibility, including customer transactions, orders and loyalty. All of its capabilities are interconnected and powered by a single source of truth. For returns, three of them do most of the work:

• Loss Prevention automatically identifies suspicious store-level transactions and alerts your team on mobile devices so they can act quickly.
• Sales Audit reconciles your POS and Order Management System (OMS) data with the transactions and inventory in your Merchandising ERP to ensure accuracy, compliance and control.
• Mobile POS gives associates mobile capabilities for all transaction types, customer profiles and omnichannel orders, wherever they are in the store.

Behind them, the Point of Sale is built to enable easy cross-channel exchanges and returns and access omnichannel orders, and Store Inventory Management tracks returned merchandise coming back into the store.

Together, these tools help store teams act firmly on the returns that look wrong without making every shopper feel like a suspect.

Fraud and Abuse Are Different Problems

The distinction matters because each one calls for a different response. The 2026 Total Retail Loss Benchmark Report, as reported by Chain Store Age in February 2026, separates the two: abuse means excessive but legitimate returns, while fraud covers fake receipts, stolen merchandise and similar deliberate deception. Abuse includes familiar behaviors such as bracketing (buying several sizes to keep one) and wardrobing (wearing an item, then returning it).

A few 2026 figures put the problem in context:

• Of the $706 billion in merchandise returned in 2025, 14.2% ($100 billion) was preventable loss from fraud and abuse. Abuse accounted for 12% (about $86 billion) and fraud for just 2%.
• Buy online, return in store (BORIS) represented $208 billion (29%) of 2025 returns and is “the fastest-growing fraud and abuse vector.” Retailers lost $4 billion to cross-channel fraud from BORIS returns, according to Retail Customer Experience.
• On the customer side, eight in 10 shoppers say a good return experience boosts repeat purchase intent.

In our view, that is the case for a targeted approach: investigate fraud as a loss prevention case, manage abuse through policy, and keep the experience fast and fair for everyone else.

Where Return Risk Enters the Store

Return risk rarely looks dramatic. It usually hides in small exceptions that add up across stores, cashiers and weeks. Common entry points include:

• Returns without a receipt
• Refunds to a card that wasn’t used for the original purchase
• A high number of voided transactions at one register or with one cashier
• Cross-channel returns, where the item was bought online and brought back to a store
• Gift certificates and credit notes issued in place of refunds
• Returned items that never make it back into accurate store inventory

None of these proves fraud on its own. Each one is a signal that deserves the right level of attention, from an automatic alert to a quick check at day’s end. That is exactly where connected store systems help.

Loss Prevention: Flag the Returns That Deserve a Second Look

Jesta’s Loss Prevention module is designed to work out of the box with ready-made rules that automatically detect suspicious store-level transactions that tend to raise red flags. The examples on the product page read like a returns-desk watch list: a high number of voided transactions, or returns without a receipt or on a credit card that wasn’t used for the purchase.

Rules and reports can also be configured to your business, so you decide which exceptions matter most in your stores. The module then supports the full investigation flow:

• Exception-based reports highlight abnormalities in store data.
• Alerts tell your team when to consider action, including on mobile devices when they’re on the floor or between stores.
• Prioritize: high-risk threats are automatically highlighted and prioritized to get immediate attention.
• Track: open and manage an active case, and keep a history of all details for an organized investigation.
• Follow up: mark situations as resolved or open, so you can see which cases still need attention.
• Video integration: the solution can be integrated with your CCTV systems for more complete monitoring.

What this means in practice: your loss prevention team stops sifting through every transaction and starts with a short list of the returns most likely to be a problem. A receiptless return to a different card becomes a case with a history, not a hunch.

Sales Audit: Make Sure Returns, Tenders and Inventory Agree

Flagging a suspicious return is half the job. The other half is confirming the records line up after the rush.

Jesta’s Sales Audit confirms that the transactions coming from your POS and OMS are accurate by comparing them with the total number of transactions and remaining inventory in Merchandising. Verification can be done at the store level, to track overall sales, or at the individual cashier level. If the values don’t match, discrepancies can be reported directly in the system.

Several capabilities matter for returns in particular:

• Efficient detection: errors are detected according to your pre-defined rules, so corrections can be made quickly.
• Manage by exception: sales information is analyzed and filtered so you can catch problem transactions and manage the exceptions.
• Automatic Sales Balancing: if the site and computer journals differ, they are automatically calculated to check whether they balance within predefined discrepancy tolerances.
• Audit reports: sales edit list, store cash balancing, sales exception, period sales, suspense sales, cashier/employee productivity and price discrepancies, for a specific sales date, week or period.
• Gift certificates and credit notes: Sales Audit manages both and can track and audit the performance of issued gift cards.

Jesta describes Sales Audit as a way to maintain stronger control over sales, returns, tenders and related operational data. Once data is audited, it flows to Store Inventory Management and Financials, and on to Analytics for more extensive reporting. For finance, that means returns are reconciled with the same rigor as sales, at the store and cashier level.

Mobile POS and Point of Sale: Context at the Counter

The associate is the first line of judgment on any return, so the tools in their hands matter.

Jesta’s Mobile POS can complete a full range of transactions in a variety of tenders, gather and update customer profiles, check on omnichannel orders and print gift receipts on a mobile printer. A full range of POS transactions can be executed anywhere inside and outside the store, including curbside. During a busy January weekend, that lets associates meet customers where they are instead of sending everyone to one counter.

Across the Omni Store Platform, the Point of Sale is designed to offer fast transactions anywhere, accept popular payment methods, enable easy cross-channel exchanges and returns, and access omnichannel orders. It can also run in disconnected mode. When a BORIS return arrives, an associate working on a connected platform has more context to work with than one working on a standalone register.

The goal is not to turn associates into investigators. It is to give them enough context to process the routine return quickly and let Loss Prevention handle the exceptions.

Returned Merchandise Still Has to Be Counted

A return is not finished when the refund is issued. The item has to come back into stock accurately, or the next inventory count will show a gap no one can explain.

Jesta’s Store Inventory Management streamlines how store employees track inbound and outbound merchandise, and inbound goods include returns as well as transfers. Mobile cycle counts let teams cross-reference the quantity the store and the POS system think they have with the quantity actually on hand. Counting with an app reduces mistakes that occur with manual tabulation, and inventory numbers that can be verified regularly make financial reconciliation smoother.

That closes the loop: the return is flagged if needed, reconciled in Sales Audit, and counted back into stock.

Keep Good Customers Moving

Most returns are legitimate. A smart approach protects those customers as much as it stops fraud.

• Abuse is a policy problem. Bracketing and wardrobing count as excessive but legitimate returns, which is how the 2026 benchmark defines abuse. In our view, they’re best handled through clear return windows, conditions and communication, not by treating the customer as a fraud case.
• Fraud is a loss prevention problem. Fake receipts and stolen merchandise belong in a case, with alerts, history, video where available, and a clear owner.
• Everyone else should get a fast return. When rules flag only the exceptions, associates can process the rest quickly and keep the experience smooth.

A Practical Returns Readiness Checklist

Before the January returns peak, review these points with your loss prevention, store operations and finance teams:

• Set the alert rules. Decide which exceptions (receiptless returns, refunds to a different card, high void counts) should alert someone right away.
• Name an owner for every case. Agree who opens, investigates and closes a Loss Prevention case, and how quickly.
• Check reconciliation timing. Confirm how fast POS and OMS data are reconciled after a cross-channel return, and at what level (store or cashier).
• Review your audit reports. Make sure sales exception, cash balancing and price discrepancy reports reach the right people for each sales date, week or period.
• Track gift certificates and credit notes. Make sure they’re audited alongside cash and card refunds.
• Count returns back into stock. Schedule mobile cycle counts for high-return categories after the peak.
• Brief associates. Explain what the system flags and what they can process normally, so good customers aren’t slowed down.

Connected Controls, Fewer Surprises

Retailers don’t have to choose between a fair returns experience and strong controls. They need controls that work quietly in the background: rules that flag the exceptions, case management that drives the investigation, an audit that confirms the numbers, and inventory that reflects what actually came back.

With Jesta I.S., retailers can connect Loss Prevention, Sales Audit, Mobile POS, Point of Sale and Store Inventory Management on one Omni Store Platform.

Talk to a Jesta expert to see how these controls fit your stores before the returns peak.