Return fraud is surging, and it’s eating into margins, bloating ops teams, and quietly eroding trust between ecommerce brands and their customers.

Operators today aren’t just asking “how do we tighten returns?”, they’re asking: How do we reduce return fraud without damaging customer experience?

At Frate, we work with top ecommerce such as Monos, Caraway, Schutz, and 437 to help them build return strategies that reduce fraud, streamline operations, and increase retention. Our returns management software helps leading teams put these safeguards in place, without adding friction.

Here’s how they do it.

1. Shorten Return Windows to Reduce Fraud Exposure

Why it matters: Generous return windows give fraudsters more time to game the system, using items temporarily or faking return shipments.

How ecommerce brands are reducing return fraud:

• Move from 30–60 day windows down to 14–21 days post-delivery.
• Use clear messaging on PDPs, confirmation emails, and your returns portal.
• Send automated reminders before the window closes. Frate merchants see this cut confusion and “surprise frustration” by 40%+.

Pro tip: Pair shorter return windows with incentives like bonus credit for exchanges. This keeps conversion high while minimizing refund requests.

2. Add Smart Return Requirements, Without Creating Friction

One of the most effective ways to prevent return abuse is by requiring item condition verification, but doing it in a customer-friendly way.

What works:

• Require photo or video uploads during the return process.
• Use Frate’s returns management software with AI verification to detect fraud patterns (e.g. signs of wear, mismatched barcodes, fake damage).
• Keep the flow mobile-first, fast, and lightly guided.

If you're researching how to reduce return fraud or stop fake return claims, this is one of the highest-ROI solutions available. You can learn more about our AI Fraud tools here.

3. Flag High-Risk Return Behavior Automatically

Not every customer should get the same return options. And that's okay.

Ways ecommerce teams reduce return fraud through automation:

• Flag patterns like “4+ returns in 60 days” or “frequent refund-only behavior.”
• Auto-route these requests to credit-only options or manual review.
• Meanwhile, give high-LTV, loyal customers white-glove flexibility.

Frate’s returns management system helps brands filter abuse at the source, so your team doesn’t waste time manually reviewing every edge case. Learn more about how to achieve this with Worfklows.

4. Tie Returns to Customer Accounts, Not Just Orders

Guest checkouts are great for conversions, but a common blind spot for fraud prevention.

Reduce returns fraud with this strategy:

• Offer faster or “free” returns only for logged-in accounts.
• Require account login to access exchanges or instant refunds.
• Reward good return behavior over time (Frate makes this trackable).

If you’re wondering how to reduce fraudulent returns while growing retention, start here. Account-based return policies give you more control, and more upsell opportunities.

5. Redefine What “Free Returns” Really Means

Too many brands are bleeding margin on “free” returns that aren’t driving long-term value.

Here’s how modern ecommerce teams reduce refund fraud and return abuse while staying customer-friendly:

• Free returns for store credit or exchange, but charge for refund-to-original-payment.
• Free only within the first 7 days post-delivery.
• Free on select items, collections, or customer segments.

Frate’s returns management software gives you control over return cost rules by product, tier, or return reason, without needing to involve your dev team.

Smart Safeguards = Less Fraud, Better CX

If you’re actively searching for ways to reduce returns fraud, here’s the playbook we see winning in 2025:

• Shrink windows with grace.
• Require just enough proof to deter abuse.
• Filter high-risk behavior early.
• Incentivize exchanges over refunds.
• Don’t subsidize fraud under the guise of “great CX.”

Frate’s returns management software helps ecommerce brands implement these strategies fast, with customizable workflows, built-in fraud protection, and automation that actually drives retention.

If you’re ready to reduce return fraud without hurting customer experience, we’re ready to help.

👉 Book a strategy walkthrough to learn more about how you can reduce returns fraud.