Fakes are getting more real. According to the Organization for Economic Co-operation and Development (OECD) counterfeits are a $461-billion-a-year problem that impacts nearly every industry, and high-value goods such as handbags, wallets and electronics are among the most commonly faked. To date, this illicit trade has primarily existed in the shadows of the grey market, but with the growth of global commerce and increasingly complex supply chains, it is threatening the legitimate economy, with retailers and distributors now exposed to significant risk.

Warehouse personnel at a leading high-end retail chain in Europe noted a higher-than-average number of returns for various product categories. The supply chain management team had suspicions about the irregularities and an extensive investigation was conducted.

Investigations uncovered that the increase in returns was partly the result of attempted returns fraud. The perpetrators would purchase authentic goods, then substitute a high-quality counterfeit for the return, thus keeping the original piece while also securing a refund. Essentially, there was a small gap where visibility into the supply chain was lost, and fraudsters were exploiting it

After exploring multiple options which may support the detection of fraudulent activity, the retailer contacted Entrupy. To solve the problem, Entrupy proposed deploying their computer vision-based Fingerprinting solution at the point of distribution.

The Entrupy Fingerprinting process is simple, only requiring the retailer’s fulfilment team to capture microscopic images of items during the packing process via a user-guided mobile application. Since every physical product – even those that are mass produced – has unique characteristics often invisible to the human eye, these images serve as registered ‘fingerprints’ for each specific item. Without added physical tags or modifications, only purchased items are ‘fingerprinted’ and a returned item can be verified as the same specific item that was originally shipped by performing another scan. The images from both scans are evaluated by Entrupy’s computer vision algorithms, and the verdict on whether it is the same item (or not) is returned in seconds.

This Entrupy Fingerprinting system is applicable to nearly all types of physical products and packaging and the microscopic imaging device requires only minimal training to use.

Following a successful two-month trial period, the European retailer decided to roll out the solution across their e-commerce warehouse operations in late-2018. The Entrupy Fingerprinting system was implemented by the retailer with user training and without any significant changes to existing processes.

Over the 2019 year, Entrupy Fingerprinting delivered stunning results for the European retailer. Entrupy protected nearly $62 million worth of inventory for the European retailer. Among these items, over 2.5 percent of returns were detected by the system as being potentially fraudulent. The overall value for the retailer from the Entrupy Fingerprinting solution was estimated at over $1.6 million. The retailer was able to eliminate losses from the fraudulent returns and, importantly, avoid corrupted inventory from entering their supply chain. By enlisting Entrupy, the European retailer simplified the returns process for suspected goods and reduced the investigation time from weeks to minutes. This enabled an effective evidencing solution for cases of impropriety, while also ensuring that customers eligible for legitimate refunds could receive them on a timely basis