Digital Shoplifting Is Surging

But ecommerce retailers are finding ways to fight back.

Good Morning!

Here are today’s highlights:

• There are things we could do to encourage more business creation.

• The EEOC is shifting its enforcement efforts.

• AI is helping startups build profitable businesses while raising less money.

• Are there lessons to learn from Ferrari, which is Europe’s most profitable automaker despite selling just 13,752 units last year?

ECOMMERCE

Here’s how brands are fighting back against shoppers who refuse to pay for online purchases: “Some young consumers are trying to make their money go further by taking advantage of retail loopholes such as returning items after wearing them once, using charge-back services on credit cards — or even pretending they didn't receive the things they ordered. ​​In response, some retailers are hitting back by imposing stricter return policies and fees. ‘Returns are very expensive for brands — it's an enormous part of their cost structure,’ Michael Yamartino, the CEO of Route, which works with some 13,000 brands to track and insure packages, told Business Insider. ‘If it's being abused, it's easy for that to make the brand unsustainable.’”

• “Some consumers are engaging in a practice called ‘digital shoplifting,’ consumer reports by Sift and Socure have said. They buy a product online that gets delivered safely to their home, but they lie to the retailer and say they didn't order it or claim it never arrived or was stolen, scoring a refund for an item they're keeping.”

• “They might also report the transaction to their credit-card company and request a charge-back to get their money refunded, while keeping the item. In a recent survey of 2,000 people by Socure, an anti-fraud company, about half of Gen Z and millennial respondents who earned more than $100,000 a year said they had digitally shoplifted in the past year.”

• “In response, some companies have started adding tags or ribbons to items to prevent them from being returned once worn or charging customers if they send back items too often. Asos started telling some customers last year that they couldn't make any more orders if they had returned too many things too often, The Cut reported.”

• “Route can help brands create profiles for customers, Yamartino said, so loyal customers aren't affected, and others can pay a small amount, such as $2 up front to avoid the shipping and return fees that could add up to $10 to $20 an order. ‘It lets us use the data that we have on folks to make the right decision about those purchases,’ he said, ‘and lets the brands protect themselves and help offset the cost of these returns programs that are getting more and more expensive.’” READ MORE