As Holiday Shopping Season Gets Into Full Swing, AI Is Changing How Retailers Detect Fraudulent Returns
Techstrong.ai, Friday, November 6th, 2026
Retailers and returns processors such as Happy Returns are using AI and computer vision to catch fraudulent returns during the holidays.
Return fraud rises during the holidays as extended return windows and online purchases increase, including schemes where buyers return replicas of designer goods.
Happy Returns, a UPS returns management company, uses cameras, computer vision and its Return Vision software to photograph flagged items and compare them with merchant catalog images, catching wrong logos, mismatched fabric or mislabeled tags.
Human inspectors remain involved, but some replicas are hard to spot by eye.
Signifyd reported that fraudulent and abusive returns made up 12% of returns in the first 26 days of January 2026, and the NRF estimates about 9% of US returns are fraudulent, worth more than 75 billion dollars.