Australian retailers are expecting an increase in shop-lifting and shoppers trying to return "Christmas gifts" dishonestly.

Retail Council chief executive Anna McPhee said shoplifting and return fraud cost retailers about $2.7 billion last year.

Under Australian Consumer Law, faulty items can be refunded, exchanged or repaired with proof of purchase.

Ms McPhee said retailers often experienced a spike in return fraud after the Christmas shopping period, when some customers tried to return, refund or exchange items without a receipt.

Source: Caboolture News