Delivering loyalty and margin delight post-purchase
LAS VEGAS, March 25, 2025 -- SHOPTALK -- Returns are on track to become a $1 trillion problem by the end of 2025, posing one of the biggest threats to retail profitability. To help retailers manage rising returns costs, streamline operations, and protect margins, Narvar, the #1 platform for intelligent personalization "Beyond Buy," today announced Shield, the industry's most advanced AI-powered returns management and fraud prevention solution, backed by Narvar's IRIS™ technology.
Returns: The $1 Trillion Problem Retailers Can't Ignore
Returns have become one of the largest financial and operational burdens for modern retailers, quietly eroding margins and increasing inefficiencies.
- Return fraud is rampant: 15% of returns are fraudulent, costing retailers $103B+ in 2024. Refund and policy abuse is also surging, with false claims of "items not received" and fraudulent returns of used or damaged goods now affecting nearly half of all retailers.
- Returns are expensive: Processing a return can cost 65% of the original sale.
- Customer experience matters: 96% of shoppers say seamless returns impact repeat purchases.
- Support teams are overloaded: "Where is my refund?" (WISMR) calls flood contact centers, increasing costs and frustrating both customers and staff.
"Returns are a $1 trillion problem that retailers can no longer afford to ignore," says Anisa Kumar, Narvar's CEO. "With Shield, we're tackling the returns problem and redefining the entire post-purchase experience helping retailers proactively manage returns, identify fraud, and protect their bottom line, all while enhancing customer experience."
AI-Powered Fraud Prevention, Backed by IRIS™
At the core of Shield is IRIS™, Narvar's proprietary AI intelligence layer, which processes more than 42 billion consumer interactions annually to detect fraud in real time. Shield is the industry's most advanced AI-driven returns solution, giving retailers unprecedented control over returns and exchanges.
By seamlessly integrating intelligent return and exchange workflows with real-time fraud detection, Shield distinguishes high-trust shoppers from fraudsters at the moment of request, enabling hyper-personalized return, exchange, and refund options to drive up and reward loyalty. For the first time, retailers can now leverage consumer behaviors and AI to proactively prevent fraudulent returns, enforce eligibility rules, and introduce automated exchange options—all in one platform.
Retailers are facing a surge in costly return behaviors, including:
- Empty box scams: Fraudsters return a box filled with paper, rocks, or other non-merchandise items to claim a refund.
- Cross-retailer fraud: Shoppers buy an item at a discount from one retailer and return it to another for a higher refund.
- Wardrobing: Shoppers wear clothing with the intent to return it after use.
Shield prevents abuse before it impacts margins, using AI to flag repeat behaviors and enforce dynamic return policies, such as shorter windows or limited returns. At the same time, Shield can reward loyal customers with more flexible return experiences, including instant refunds at first scan, seamless exchanges, and keep-the-item options, among other features.
Driving Measurable Business Impact
By delivering smarter returns management, fraud prevention, and customer experiences, Shield drives revenue protection, revenue retention, revenue growth, and operational efficiencies. Early adopters, including American Eagle, Estée Lauder, and others, are already seeing measurable bottom-line impact, including:
- 18% more revenue protected due to eligibility enforcement
- 40% revenue retention driven by exchanges
- 40% reduction in reverse logistics cost savings with Return Concierge
- 50% reduction in call center costs
Shipping Protection Builds Consumer Trust and Unlocks Another Revenue Stream for Retailers
Retailers are also facing growing challenges with lost, stolen, and damaged deliveries. In 2024 alone, 119 million packages were reported missing, and 30% of returns were due to shipping issues.
To address this, Narvar also today announced Shipping Protection1 in partnership with InsureShield® Shipping Insurance. By allowing shoppers to add package protection at checkout, retailers can offload risk to a third party while giving customers peace of mind knowing their purchases are covered. If an issue arises, they can seamlessly file and manage claims through a branded self-service portal, reducing support inquiries, protecting retailer margins, and creating a smoother checkout experience that can drive higher conversions.
Availability
Narvar Shield is now available to retailers in applicable regions. Shipping Protection is currently available to U.S. retailers. Visit Shoptalk booth #2140 or Narvar.com to learn more.
About Narvar
Narvar is the #1 platform for intelligent personalization "Beyond Buy," empowering over 1,500 of the world's most admired brands—including Sephora, Levi's, Sonos, Warby Parker and LVMH—to engage consumers, deliver seamless operations and grow their business. Powered by IRIS™ and billions of data points, Narvar transforms the post-purchase journey by delivering personalized insights that build trust, safeguard operations and unlock sustainable growth. From returns and exchanges to tracking, notifications and fraud prevention, Narvar sets the standard for data-driven retail experiences. To learn more, visit Narvar.com.
Disclaimer
1 Package insurance is provided by UPS Capital Insurance Agency, Inc. via the Narvar platform.
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