Returns are becoming a data problem, not just a customer-service problem. During the holiday season, retailers have to absorb more gifts, more size and color mistakes, and more pressure to keep policies frictionless. The same convenience that helps close a sale can make it harder to know what is actually coming back.
A Digiday sponsored article from Sensormatic Solutions argues that the missing piece is product identity. If an item can no longer be verified after it leaves the store, a return can become an inventory discrepancy, a fraud opportunity, or both.
Returns lose the product’s identity
The article cites the National Retail Federation’s 2025 Retail Return Report, which found that 15.8% of annual sales end in returns, rising to 17% during the holiday season and 19.3% for online sales. It also says 9% of 2025 holiday returns were fraudulent, while 75% of retailers reported that the problem was worsening.
That creates a visibility gap. Retail systems can track an item through the point of sale, shipping and inventory, but the identifier may disappear once the product is sold. That makes tactics such as empty-box returns, overstated quantity claims and item swaps difficult to verify at the counter.
Sensormatic’s proposed answer is an embedded RFID tag, placed inside a seam or integrated into an existing brand or care label during manufacturing. The tag gives each unit a persistent identifier that can help show where the item came from, how it moved and whether it has been replaced.
The useful shift is from fraud detection to inventory accuracy
The more interesting implication is not simply that retailers may catch more bad returns. When a valid item is scanned, the same data can allow it to re-enter the inventory system immediately as available, damaged or otherwise classified. Returns become part of the stock record instead of a blind spot between the sales floor and the back end.
That could change how retailers think about loss prevention. Rather than adding friction to every return, they can use item-level information to identify where losses actually occur and apply tighter controls there. Associates spend less time resolving uncertainty, while inventory counts become more useful for stores, online availability and replenishment.
The catch is that this approach depends on manufacturing, tagging and retail systems working together before the product reaches the customer. The strategic consequence is clear: as returns become a larger part of commerce, the brands with the best customer experience may be the ones that make product identity survive the sale.