REI bans frequent returners as return fraud costs retailers billions annually

As the holiday shopping season ramps up, major retailers like REI, Target, and Amazon are implementing stricter return policies to combat rising return fraud, which cost the industry over $100 billion in 2023, according to the National Retail Federation.

These changes aim to curb common scams, such as returning used items or using fake receipts, while encouraging consumers to be more diligent when making purchases.

In a statement to KIRO 7, REI confirmed that a small percentage of its members—less than 0.02%—who frequently abuse its return policy will now be banned from making exchanges or returns.

In the statement, the outdoor retailer explained that these members have an average return rate of 79%, often involving used items, costing the company approximately $1,400 annually per individual.

The retailer has attempted to address the issue in the past through warnings and probation periods, but these measures proved ineffective.

“We pride ourselves on having a generous returns policy,” REI stated. “In the interest of preserving this benefit for as many of our members as possible, we recently updated our policy to provide an exception for members that have abused it in the past.”

Other retailers are also taking steps to mitigate losses from return fraud.

Target now reserves the right to deny refunds it suspects are fraudulent, and Amazon began imposing processing fees for high-return items earlier this year.

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