Protect Your Margins From the Fraudster Next Door

Not all fraud looks like fraud — and that’s what makes it so hard to catch.

It doesn’t come with red flags or fake credit cards. It comes from real addresses. Repeat customers. Polite emails that say, “My package never arrived.”

And increasingly, it’s coming from your best shoppers.

Welcome to the new era of delivery fraud: subtle, behavioral and hiding in plain sight. Narvar data shows that more than 15 percent of delivery claims are now flagged as fraudulent. Up to 5 percent of total orders trigger a claim. That’s not just a customer service issue; it’s a strategic challenge and a growing threat to margins. And the retailers that are responding most effectively aren’t just tightening policies; they’re rethinking how they handle claims altogether.

Take the case of a loyal customer who reported a missing pair of sneakers. Tracking said “delivered,” but the brand, eager to preserve the relationship, issued a replacement without question. A week later came another claim. Then another. Support eventually flagged the behavior, but by then the brand had eaten the cost of three shipments and hours of agent time.

The kicker? That same address had filed similar claims with three other retailers.

This isn’t a blip. It’s a shift. And it’s quietly costing retailers millions.

The Hidden Cost of Looking the Other Way

For years, retailers took a “refund first, ask questions later” approach to delivery issues. In theory, it was a gesture of goodwill. In practice, it’s become a liability.

Unchecked claims erode profitability. Manual reviews burden stretched support teams. And inconsistent policies across channels chip away at consumer trust.

Even worse? The overcorrection. When brands crack down too hard as a result, they risk alienating loyal customers. One poorly handled claim — delayed, denied or dismissed — can break a relationship that took years to build.

It’s a lose-lose situation: fraud thrives, loyalists churn and no one trusts the process.

A Shift in Consumer Behavior

Delivery fraud isn’t always malicious or even obvious. It often shows up as a friendly message, a familiar name, a plausible excuse. Sometimes it’s intentional. Sometimes it’s opportunistic. But either way, it’s on the rise — and harder to detect.

Why now?

Urban packages sit unattended longer as people return to the office. Social feeds casually explain how to game the returns system. Fraudsters have gotten smarter. And everyday shoppers, increasingly under financial strain, have become desensitized to the idea of filing a false claim.

What once felt dishonest now feels like a loophole.

More than half of consumers recently surveyed admitted to doing it at least once. For some, it’s a quick fix. For others, it’s a pattern.

And when no-questions-asked refunds become the norm, the fallout is bigger than the balance sheet. Brands grow wary. Trust frays. And customers who play by the rules feel overlooked.

When Trust Breaks, So Does Loyalty

Today’s shoppers expect more than efficiency; they expect recognition. When fraud pushes brands to tighten policies across the board, it sends a troubling message to consumers: you’re not trusted. That kind of blanket approach may deter fraud, but it chips away at the relationship and damages your brand reputation.

The most effective fraud prevention strategies are designed to recognize nuance. That means a longtime loyalist shouldn’t be treated the same as a first-time buyer trying to fleece the system.

Loyalty isn’t built on perfection but on how brands respond when things go wrong.

From Reaction to Precision

Leading retailers are rethinking how they manage claims — not by removing empathy, but by adding clarity.

It starts with pattern recognition. Not all claims are equal. Was the package signed for? Has this address submitted multiple claims? Does the carrier scan history back it up?

With the right signals, high-risk claims can be flagged without casting doubt on honest customers.

Next comes smarter workflows. Low-risk claims can be automated for speed. Higher-risk ones get routed for review. The result? Faster resolution, less manual overhead and more consistency.

Some brands are also giving consumers more control. Self-service tools let them resolve issues quickly and within policy, freeing up support teams for more complex cases.

Claims as a Brand Touchpoint

It’s tempting to treat delivery claims as just another logistics headache. But in reality, these are much more than operational glitches. They're moments of truth in the customer journey. When something goes wrong post-purchase, consumers expect more than a simple refund. They want fairness, recognition and respect.

How a brand responds in these moments can strengthen the relationship or break it completely.

That’s why leading retailers are starting to shift their mindset. Delivery claims are no longer a back-office problem to be swept under the rug. They're a strategic function that requires consistency, intelligence and care, just like marketing or merchandising.

Handled right, delivery claims don’t have to remain a cost center that’s a drain on resources. They can become a powerful lever to protect margins, preserve customer loyalty and rebuild trust.

In today’s competitive market, trust is more than a core value. It’s a critical advantage that separates winners from the rest.

Catherine Dummitt is vice president of marketing at Narvar, the No. 1 platform for intelligent personalization “Beyond Buy.”