Riskified introduced Dynamic Returns, an AI-powered return decisions function that adapts in real-time based on customer eligibility.
"Fraudulent claims don’t just hurt retailer profitability, they cost good customers time and patience," says Jeff Otto, chief marketing officer of Riskified. "When refunds are delayed for days or weeks, loyal shoppers become frustrated and may not come back. Riskified’s AI platform with Dynamic Returns helps merchants quickly distinguish between abusive and legitimate claims by evaluating customer behavior and identity history in real time. That precision allows trusted customers to receive fast resolutions while risky behavior is handled appropriately, protecting revenue while keeping good customers satisfied and loyal."
Key takeaways:
· Riskified's 2024 analysis found that 1-2% of total order value measured in sales dollars was requested back as refunds, with nearly one in four dollars claimed being abusive. In response to rising abuse, many retailers are implementing restrictive tactics like flat return fees, shorter return windows, and delaying refunds, often taking 10-plus days for warehouse inspection.
· Claim rates for orders over $2,000 are 2.5 times higher than those under $100, and orders over $1,000 are 33% more likely to be abusive compared to the average.
- "Item Not Received" (INR) claims are the most abused category, with a 25% higher likelihood of fraud vs "Missing Items" (MI) claims, as bad actors exploit liability gaps (consistent with Dark Web examples). However, the surge in ecommerce order deliveries means there are plenty of legitimate INR claims.
- Claims filed within the first seven days are over 20% more likely to be abusive vs. the average, creating tension for merchants who want to provide fast service to legitimate shoppers.
- Dynamic Returns enables refund and exchange options to be tailored in real-time based on customer risk and eligibility. Rather than applying uniform rules or delaying refunds until warehouse inspection, merchants have the identity insights they need to assess customer eligibility and trigger the appropriate outcome, using real-time return intelligence that evaluates customer behavior and network-level signals.
- As soon as a return claim is submitted, retailers can act immediately. Trusted shopper identities can receive an instant refund, replacement items can be shipped without waiting for the original, and some refunds can be issued without an item being returned at all. This dynamic approach allows merchants to handle clear cases of abuse, recognize trustworthy shoppers, and manage the gray area in between.
