10 TIPS
In 2025, retailers incurred $706 billion in returns, with about $100 billion of that value lost to preventable fraud and abuse, according to an Appriss Retail analysis. The following strategies can reduce fraud and protect profits along the supply chain. Preventing Supply Chain Fraud
1 LOOK INSIDE
8 TIGHTEN INVENTORY CONTROLS Distribution centers can get overlooked. DC mispicks, transfer errors, and vendor collusion can quietly drain inventory value at scale. Four-eye approvals on outbound shipments, periodic access reviews, and strict separation of duties make it harder for individuals to commit fraud. Cycle counts and blind receiving processes add further protection against manipulation at the receiving dock. 9 VALIDATE RETURNS, SHIPMENTS Retailers witnessed $4 billion in cross-channel fraud during BORIS (buy-online- return-in-store) activity, finds the Appriss Retail Total Retail Loss Benchmark Report. This issue arises because systems treat channels independently. Verifying returned goods against original purchase data and shipment manifests can prevent fraudsters from exploiting these gaps.
YOUR OWN WALLS Employee theft, inventory discrepancies, and operational inefficiencies are massive drivers of loss throughout the supply chain. Start with an internal review of stores, warehouses, and distribution center receiving areas. Identify risk points and evaluate where controls or visibility are weakest.
2 UNIFY DATA ACROSS CHANNELS A major blind spot in many supply chains is siloed data. Having an integrated view of data, including online and in-store transactions and customer call centers, helps spot unusual behaviors further down the supply chain. Integrated analytics connect purchase, return, and inventory data so patterns don’t slip through the cracks. 3 MONITOR INVENTORY MOVEMENT RFID technologies work alongside AI and retail analytics to help uncover blind spots along inventory journeys. Look for frequent “lost in transit” claims, unusual product transfers between facilities, or higher- than-normal damage reports. 4 REVIEW PARTNERS THOROUGHLY In many fraud cases, collusion between internal staff and external partners enables invoice padding, false deliveries, or double- billing. Suppliers, freight
brokers, and carriers can all become part of phantom deliveries or inflated freight charges. Regular background checks, contract reviews, and performance audits help expose vulnerabilities early. 5 APPLY FRAUD DETECTION AI and retail analytics technologies review millions of transactions in near real time to detect subtle patterns and learn from past incidents. AI-supported fraud detection spots organized behaviors that manual processes overlook, reducing fraud while keeping legitimate transactions flowing. 6 AUTOMATE PROCESSES; SPEED MATTERS Manual, ad-hoc processes are fertile ground for fraud. Standardizing approval workflows, automating
validations, and enforcing consistent checks ensure that every touchpoint follows the same fraud- resistant protocols. Technology improves transparency across logistics operations to verify when inventory changes hands. 7 EDUCATE FRONTLINE TEAMS Frontline teams—from procurement and receiving to warehouse staff—are a critical first line of defense. They need to recognize the warning signs: unusual return volumes, suspicious invoice patterns, sudden changes to supplier payment details, or shipment manifests that don’t match purchase orders. Regular training establishes accountability and ensures teams know how to escalate what they see before an anomaly grows into significant loss.
10 BUILD CROSS-FUNCTIONAL FRAUD PREVENTION
Bring functional departments to the same table so emerging threats don’t fall through organizational cracks. Sharing data across procurement, transportation, inventory, and returns systems helps uncover patterns that might otherwise go unnoticed.
SOURCE: PEDRO RAMOS, CHIEF REVENUE OFFICER, APPRISS RETAIL
8 Inbound Logistics • June 2026
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