Policy Abuse and Its Impact on Merchants Report

This report presents findings from Riskified's study titled 'Policy Abuse and Its Impact on Merchants: Global Benchmarks 2023.' The document outlines the challenges faced by online retailers due to consumer misuse of return policies, coupon codes, and loyalty programs, which significantly affect their profitability. According to the report, 90% of online merchants report that policy abuse is a major issue, with 93% acknowledging the necessity of maintaining generous policies to attract and retain customers. The report details various forms of policy abuse, including excessive returns and refund scams, and highlights the operational burdens these create for merchants. It also notes that a significant percentage of retailers do not have automated systems to address these issues, relying instead on manual processes that prolong refund and return handling. The report identifies economic and emotional factors contributing to the rise in policy abuse and emphasizes the need for merchants to balance customer-centric policies with profit preservation.