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By Raj Ramanand, Signifyd CEO and co-founder
I’d love to say that the pain of the retail returns season — that margin-crushing, annual parade of post-holiday regret — is a thing of the past.
It’s not.
But in 2026, we are at a turning point. We’re moving past the first phase of conquering any serious problem: Recognizing the problem and identifying the cause. Check and check. And now we are deep into the work to fix it.
Not surprisingly, the repair job relies heavily on AI. In particular, relief relies on machine-learning models able to interpret vast amounts of data to pinpoint patterns, problems and the priorities needed to reduce the number of returns in the first place and to quickly distribute refunds to legitimate customers while protecting the business from fraud and abuse.
Returns aren’t new. Nor are the solutions aimed at making reverse logistics more efficient and improving the dispositioning or disposing of products that come back by the truckload in the first quarter of the year.
But technologists and AI experts are now going one better. Leading innovators are developing solutions that go beyond better ways to move merchandise around and instead are focusing on building trust into the returns and refund process.
The leaders in the return revolution today provide a holistic view of returns and a holistic approach to managing them. By analyzing returns through network data provided by a consortium of retailers, future-focused returns solutions surface the reasons customers return products. That means merchants can eliminate misunderstandings and correct inaccurate or unclear product descriptions, sizing issues, manufacturing flaws and fulfilment blunders before the next order even goes out the door.
Returns revolutionaries are also relying on network data and machine-learning to instantly identify legitimate refund requests while assigning automation to determine the level of risk accompanying each incoming request. That means good customers receive instant refunds, which 48% of survey respondents told Signifyd was a key to a positive return experience. Meanwhile, retailers can require that items be inspected before a refund is issued in cases of questionable requests or even reject requests they find to be fraudulent.
That makes this an exciting time for returns — something maybe you thought you’d never hear. At Signifyd, we’ve experienced this excitement before. As a pioneer in the guaranteed fraud protection space for more than a decade, we’ve seen how the power of AI protects online checkout. Now, with our Intelligent Returns Suite and other innovations, we see the power of AI protecting the entire buying journey.
Returns are not going away. The weight consumers place on the ease and speed of returns is only growing. Now add the fact that organized fraud rings are turning to return fraud at scale to diversify their revenue streams as online checkout grows more secure. Fraudsters are iterating in the returns space and deploying gen AI to uplevel attacks while finding new vulnerabilities in agentic commerce flows.
Last year, the number of online returns increased by 17% over 2024, according to Signifyd data. At the start of 2026, fraudulent and abusive returns were running at 12% of all returns, our data showed.
Returns are no longer the cost of doing business. Instead they’ve become what ultimately could cost you your business.
Retail has never been easy. Competition is fierce. Margins are thin. Consumer preferences and the rules of engagement change constantly. Today’s retail leaders face stubborn inflation and consumers whose confidence has been shaken. Many retailers must navigate tariffs and other fallout from a global trade war. The rise of agentic commerce brings with it tantalizing possibilities, but also anxiety and the need to adapt.
For online merchants, every single successful conversion has always been precious. But it’s possible they are even more precious today, given the pressures businesses are facing.
The opportunity AI brings to find a way around the returns reckoning provides the potential to capture revenue that’s been slipping away for years. And, in the end, that provides much-needed relief and much-needed profit.
Explore Signifyd’s Return Solutions: Visit our Returns Insights and Instant Refund pages to learn more.
