Retailers Face AI-Generated Return Fraud Surge

Modern Retail reports that retailers are seeing a rise in AI-generated photos and documents used to file fraudulent e-commerce return claims in recent weeks, according to executives at Boll & Branch, Yofi, Signifyd and others. Experts say the trend is increasing as image and LLM tools improve, and eMarketer projects $379 billion in returns in 2026. Retailers are adopting stricter verification such as video calls and timestamped evidence.