Fashion item refunds increase in the UK

The research was conducted by Equifax’s Digital Solutions team, which specialises in fraud detection and chargeback management solutions provided on the company’s Kount-branded platform. The findings come during evolving concerns over friendly chargeback fraud and refund abuse in the UK, especially at the beginning of seasonal spending peaks. Even if chargebacks represent an important consumer protection mechanism, they are also liable to abuse, including by merchants’ own customers in friendly fraud.

Through its research, Equifax found that unsatisfactory condition represents the most common reason provided by consumers, with 29.6% of them returning products due to this, while misdescription and failure to deliver followed closely behind, amounting to 27.6% and 25.3%. This underlines that most UK residents leverage refunds and chargebacks appropriately. On the other hand, 6.5% of UK adults admit requesting refunds or disputing charges even for items they consider satisfactory, with the figure increasing to 9.4% for 18 to 24-year-olds, underscoring a potential move towards online purchasing and refund culture among younger demographics.

According to officials, recent opinions about how consumers justify returns demonstrate that many consider buying and refunding items more as renting rather than purchasing. This can lead to a different set of norms and offer consumers the ability to act in ways they would not typically consider, which could explain their attitude toward chargebacks. The shift in behaviour can also be attributed to increased cost-of-living concerns and the current social media and fast fashion pressures. Furthermore, representatives from Equifax stated that most consumers leverage chargebacks and refunds responsibly, but the disproportionate impact of refund abuse and friendly fraud on businesses represents a priority for retailers as a traditionally busy period for reclaim finishes. Additionally, merchants need to search for data-driven solutions that differentiate questionable chargebacks and protect themselves from bad actors and consumers.

As a global data, analytics, and technology company, Equifax aims to advance the global economy by supporting financial institutions, companies, employers, and government agencies in making decisions more securely and confidently. By merging differentiated data, analytics, and cloud technology, the company aims to provide insights that enable decisions. With its operations based in the US, Equifax offers its services or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region.