The Proof Standard Is Rising—AI Return Fraud Filters and You

Last year, you could win a dispute with a decent note and a screenshot.

This year, that same package gets denied because it’s missing the lot code, the timestamp, the condition photo, and the proof of delivery.

It feels personal.

It’s not.

Retailers are under pressure from returns volume and return fraud—and they’re tightening proof-of-purchase requirements to protect their businesses and reduce operational costs.

The stats explain the shift

NRF reports return fraud remains a serious issue: 9% of all returns are fraudulent, and 45% of shoppers say it’s acceptable to “bend the rules” when returning items.

Retailers are responding with technology. NRF’s research and press release reporting note 85% of retailers said they’re employing artificial intelligence (AI) to detect or prevent return fraud.

Reuters also reported that UPS-owned Happy Returns is deploying an AI tool (“Return Vision”) to help flag fraudulent returns, as return fraud accounts for about 9% of returns and costs U.S. retailers tens of billions of dollars annually.

So the filter is tightening.

And when the filter tightens, the burden of proof shifts downstream—toward suppliers.

A fictional example (for illustration only)

Fictional example: Last year, you disputed an “unsaleable” claim with an email and won.

This year, the same retailer denies it because the photo doesn’t clearly show the product identifier, the timestamp, and the condition. The claim is auto-closed, and the window to resubmit is short.

You didn’t get worse at your job. The proof standard moved.

What “AI filters” really mean for suppliers

You don’t need to picture a robot deciding your fate.

Think of it this way: retailers use systems to flag anomalies and enforce consistency. That often results in:

• stricter documentation requirements

• more automated denials when fields are missing

• higher expectations for photo quality and identifiers

• tighter timelines for submission and correction

In other words: if your evidence is incomplete, it’s not “almost good enough” anymore.

It’s a no.

The Retailer-Ready Proof Pack (build once, reuse all year)

If you want a practical Q1 upgrade, this is it.

Create a repeatable proof pack template based on claim type:

Delivery dispute (“not received”)

• Proof of delivery (POD) with scan trail

• Shipment identifiers (carton tracking if split shipments)

• Delivery timestamp and destination

• Any carrier investigation result

Damage/condition claim

• Photos showing condition and identifier (item label, lot/date code)

• Receiving condition evidence (when available)

• Packaging specs if disputes relate to carton/pallet integrity

Defectives/unsaleables

• Lot/date traceability

• Quality documentation (if relevant)

• Photos that show the specific issue clearly (not a distant shot of a case)

Returns/disposition mismatch

• Return merchandise authorization (RMA) record

• Return scan events and location

• Disposition notes (restock vs. destroy vs. salvage)

• Any mismatch documentation (wrong item returned, quantity mismatch)

Yes, it’s more work up front.

But it’s dramatically less work than rebuilding proof after a denial.

The “photo rules” that win more disputes than clever wording

If your proof includes photos, make them usable.

A simple standard:

• one photo that clearly shows the identifier (item label + lot/date code when applicable)

• one photo that clearly shows the condition issue

• one photo that shows context (case, pallet, packaging)

• and if quantity is at issue, include a countable view or supporting document

You’re trying to remove ambiguity.

AI filters love clarity. Humans do too.

The Q1 timeline discipline that keeps recoveries alive

Proof gets harder to find as days pass.

So, adopt a simple internal service-level target in January and February:

• collect evidence within a defined number of business days

• assemble and submit the package before the claim window tightens

• track “days-to-submit complete package” as a key metric

Fast, complete, consistent.

That’s the new competitive advantage.

What’s at stake if you ignore the rising proof standard

Denied disputes don’t just hit the current month.

They become precedent.

They create a “we never win these” belief inside your team, which leads to more write-offs, less root-cause fixing, and a quiet deterioration of margin discipline.

Where HRG fits

HRG’s view is that technology is useful—but it doesn’t replace expertise. When proof standards rise, someone still has to interpret what happened, assemble documentation that the retailer accepts, and decide what’s worth disputing based on win likelihood and business impact.

That’s where HRG operates: people plus technology, focused on recoveries and on preventing repeat issues—so Q1 doesn’t become a recurring tax on your best-selling items.

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