Tariff Refunds, Return Fraud, and the Value-Seeker
Open with Joy, May 2026
Your costs are up, your customers are cautious, and someone just returned an empty box.
The Supreme Court struck down the reciprocal tariffs. The $166B refund process just opened. Are you clear on your path to a refund?
The tariffs that remain are still enough to reshape your landed cost.
Nearly half of consumers now identify as value-seekers. Your premium customer is being tested.
Return fraud just hit 15%. #SMH
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Onward.
Where our focus is for May
Tariff refunds are on the table. But the saga continues.
What Happened: The reciprocal tariffs were struck down this past February. The $166B refund portal opened April 20. If you paid IEEPA duties between April 2025 and February 2026, your pathway to a refund is via the Importer of Record.
Refund requirements include an ACE Portal account, ACH enrollment, and a clean CSV of every eligible entry number. We made a checklist for you.
Despite the reversal of IEEPA tariffs, a lingering structure, the 10% baseline, China rates, Section 301, remain in play. While the initial shock has been absorbed, there is an ongoing complexity that needs to be folded into your COGS and pricing strategy moving forward.
Alexia’s Take: Explore your refund options. Your customs broker can file through CAPE, but they need a push from you. Documenting your Entry Summaries should be baked into your SOPs by now.
Your Takeaway: Land a plan of action with our tariff refund post.
The Value-Seeker Is Your Customer Now.
What Happened: Nearly half of global consumers (47%) now identify as value-seekers. These are people intentionally trading down, delaying purchases, and choosing private label over brand. Researchers are calling it a permanent recalibration.
Why It Matters: For premium modern consumer brands, this is the most important consumer signal of the year. The assumption that your customer is immune to price sensitivity is worth revisiting. Tariffs aren’t leaving a lot of wiggle room, so you need to lock in your value proposition to make the price feel right.
Alexia’s Take: This will be the hill I die on 👏🏼every 👏🏽single 👏🏿time. Where 40% of perceived brand value now comes from non-price factors, including fulfillment accuracy, post-purchase experience, and how you handle an escalation, it is critical that everyone in the business understands their role and responsibility in the full CX lifecycle. Value is no longer pegged on perception and prestige alone; it’s deeply dependent on the “Open With Joy” moment of quality, fulfillment, and sustained adoption.
Your Takeaway: When did you last audit what your customer actually experiences between checkout and delivery? I’d be curious to know if there is an uptick in “I didn’t pay this price for [insert complaint here]” tickets.
Return Fraud Is Accelerating. What is this world coming to?
What Happened: Return fraud now accounts for 15% of all ecommerce returns, roughly $103 billion annually. The most common patterns: bracketing, wardrobing, and empty-box returns. Over half of consumers admit to at least one of these behaviors.
Why It Matters: Most small brands have no fraud detection infrastructure, and tightening the policy is the wrong response. Brands adding return friction are seeing repurchase rates fall faster than return rates. The brands moving in the right direction are doing two things: requiring photo documentation before approving claims, and steering customers toward exchanges and store credit with meaningful incentives.
Alexia’s Take: Nothing grates my carrot more than a return fraud. I know there are companies out there doing the work to mitigate this trend. I've passed on Happy Returns before. But at 15% fraud, the in-person drop-off is worth a second look. No repackaging headache for honest customers, and handing a return to a human deters the casual fraudster. What I'd want to know: does it actually stop the determined one, or do they just ship it back the old-fashioned way? I'm ready to be convinced.
Your Takeaway: What percentage of your returns result in an exchange versus a refund? Do you even know? I’d be curious to talk about it.
Freaking Returns, Man.
What Happened: If the rise of return fraud wasn’t enough, the average ecommerce return rate is now 20.8%. Fashion and apparel run 25 to 40%. Only 48% of returned items are resold at full price. And here’s the number most brands miss: a 25% return rate can reduce contribution margin by 70%, not 25%.
Why It Matters: Most brands track returns as a cost line. The real damage is in LTV. A first-time customer who returns is significantly less likely to buy again. That means your CAC, your shipping cost, and your processing cost are all gone. And so are they. The fix isn’t downstream, and it’s not a policy that punishes your best customers.
Alexia’s Take: This is one of my favorite problems to solve because it truly embodies the Open With Joy philosophy, enabling every team member to own their role in the customer experience, from product decisions, quality, and timing, to branding and communication, to fulfillment and beyond. AND the cost is minimal!
Your Takeaway: Check out our case study: How Smart DTC Brands Use Returns to Find Margin →
With love, Best Buds
Open With Joy is brought to you by Best Buds CX, a fractional COO partnering with bold brands built on core values. We implement customer-retaining operations across the business that empower teams to operate at their highest potential so you can reclaim your time, energy, and ambition. Learn more.
