A recently published report projects that the returnless refund fraud detection market will explode over the next decade. This growth is expected to be driven by high return volumes, the expansion of preventable shrink, and AI. The report also dives deeply into the many segments of the market and provides several insights that are important for sellers to know.
Major Growth Expected for Returnless Refund Fraud Detection
According to the report, the returnless refund fraud detection market is expected to grow from around $430 million in 2026 to $1.5 billion by 2036. This is a 13.5% compound annual growth rate (CAGR) throughout the forecast period.
For those unfamiliar, returnless refund fraud is a type of ecommerce fraud where customers exploit refund policies that don’t require items to be sent back to get a refund. They’ll receive the item, claim it is damaged or otherwise defective, get their money back, and then either keep the item and use it for free, or may even resell it to others to make a profit.
This, and other types of fraud, cost companies billions each year. While many companies require products to be sent back in order to get a refund, some may not. The reason some companies may offer returnless refunds is to avoid the high costs of things like return shipping, restocking, and inspections.
The Key Drivers of This Projected Growth
There are a couple of key drivers that the report believes will push this returnless refund fraud detection market forward. First, higher return volumes mean a higher chance of return fraud taking place, increasing the need for detection. In fact, the National Retail Federation (NRF) estimated nearly $850 billion in 2025 returns, with around 9% being fraudulent.
Another driver is the expansion of preventable shrink. These are losses that aren’t inevitable, and may be reduced by better processes, strategies, and systems being in place. As preventable shrink grows, sometimes driven by fraud, companies will be looking for ways to reduce it, and fraud detection is certainly an option many companies will consider.
Finally, companies switching from manual detection strategies to AI-driven policies may also push the industry forward. However, while AI is helping drive the growth of this market, it may also help scammers and fraudsters improve and scale their scams at the same time.
Segment Analysis
The report also dives deep into many of the different segments of the returnless refund fraud detection market. First, by detection type, ecommerce risk scoring is the most common, with a 31% market share in 2026. Other types of detection that companies use include claims verification, identity linkage, policy orchestration, and exception routing.
Next, the report finds that cloud/SaaS deployment dominates the space, with an 81% market share of all deployments. This isn’t surprising, as using cloud platforms eliminates the need to maintain servers and is often easier to set up, update, and use.
Also, the report went over the retail verticals that make up the returnless refund fraud detection market. Leading the pack was the apparel vertical, which makes up a 29% share of the market. Other verticals where this type of fraud detection is common include electronics, beauty, home goods, and specialty retail.
The Market is Expanding Across All Regions
Finally, the report finds that this growth isn’t limited to certain parts of the world. In fact, many of the major regions across the globe are expected to experience major growth from 2026 to 2036. The largest growth is in India, with an expected CAGR of 16.8% in the forecast period. This is followed by:
- Australia at 14.4%
- United Kingdom at 14.1%
- United States at 13.2%
- France at 13%
- Germany at 12.6%
- Japan at 12.1%
According to the report, the market is expected to grow quickly in India due to the expansion of the Open Network for Digital Commerce (ONDC) network. This may introduce a huge number of previously-unprotected merchants to policy abuse vulnerabilities.
As you can see, the report expects returnless refund fraud to continue, and companies around the world are expected to invest in more fraud detection going forward to reduce losses as much as possible.
