By Klas Hjort

International experience, mainly from the United States and the United Kingdom, shows that return fraud has become a rapidly growing and complex problem. Organized Retail Crime (ORC) includes examples such as the return of stolen products, exchanged or tampered goods, false receipts, and the systematic abuse of generous return policies. This type of crime damages both profitability and trust between consumers and traders. Swedish retail is also facing new challenges linked to increased return volumes, especially in e-commerce and secondhand.

The Digital Product Passport (DPP) is seen by the EU as a tool to enable the transition to a more circular economy. The DPP acts as a digital representation of a physical product -- a “digital twin” -- and contains information about the product's entire lifecycle, including material, manufacturing process, use, repairs, reuse, and recycling. The information can be made available via, for example, QR codes or a Near Field Communication (NFC) tag on the product and can be updated over the life of the product. This allows for greater transparency and better decisions for both consumers and trading companies.

At the same time, circular trade is growing — especially the sale of second-hand goods in both physical and digital channels. A key problem is that product information is often lost upon change of ownership, making it difficult for the trade to assess the condition, value and authenticity of products. This complicates resale, return handling and warranty commitments — and increases the risk of fraud.

Added to this are demands for separate collection of textile waste in Sweden from 2025, as well as EU initiatives on DPP and Right to Repair, which aim to increase the traceability and reusability of products. All in all, this means both new risks and new opportunities for retailers to create sustainable and business-friendly solutions for both return management and circular product flows.

Despite these rapid changes, there is currently no comprehensive picture of how return fraud and product tracking are developing in the Swedish context. This project therefore aims to draw lessons from international examples, in particular the United States and the United Kingdom, to map developments in Sweden and explore in dialogue with trade actors how digitalization — especially the DPP — can be used to strengthen trade resilience, increase transparency, reduce fraud and streamline return flows.

Despite the ongoing standardisation within the DPP, there is currently a lack of a clear focus on return management and risk scenarios linked to fraud. This project therefore aims to fill this gap by contributing concrete knowledge and solution proposals. The project aims to create a deeper understanding of how return fraud and loss of information in circular product flows affect Swedish retail — today and in the future — and to identify digital solutions that can strengthen the resilience of trade.

A central part of the project, led by Klas Hjort at Lund University, consists of actively participating in the international effort against return fraud by visiting and establishing cooperation with the global networks RLA (Reverse Logistics Association) and NRF (National Retail Federation). RLA is a worldwide network that brings together retail, logistics operators and technology companies to develop solutions in return logistics, circular economy and fraud prevention. NRF is the largest trade organization in the United States and actively works on issues such as Organized Retail Crime, sustainable commerce, and digital transformation.

In Sweden, a series of interviews with Swedish retail operators are conducted to survey the current situation regarding return handling, digitization and the occurrence of return fraud. The interviews focus on both the challenges of today and the needs of the future. The project also examines the extent to which return processes are digitized today, as well as what tools and systems are used for traceability and information sharing.

The project is also directly linked to the European initiative Cirpass-2, in which Future by Lund member whatt.io participates. Cirpass-2 is working on developing standards for how DPP should be designed and what type of data should be included. whatt.io also develops its own solutions for DPP. Future by Lund and whatt.io are working together on the project MCRS (Multi-circular resilient value chain for sustainable manufacturing) and looks at how DPP creates new conditions for traceability, reuse and data-driven sustainability work in trade.

As part of the project, participants will demonstrate how DPP can be concretely used on a physical garment to verify the authenticity of the product, check if it is reported as stolen and thus prevent copies or unauthorized products from re-entering the trade. The demonstration is a special part of the project, and is carried out by Future by Lund and whatt.io.

The text is based on the project application.

Project Manager: Klas Hjort, Lund University

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