Chances are you stood in line before Christmas to buy that sweater for Aunt Betty, and chances are you’ll spend time in a queue after Christmas to return a gift purchased for you.
Such is the retail experience around the holidays: Form a line and wait.
But how fast or slow your gift-return line moves could be determined by the 1 percent or so of the shopping population that is trying to rip off the store.
Return fraud, as it is known, is costly to retailers and is especially prevalent at year’s end. According to the National Retail Federation, about one-third of the nearly $9 billion that retailers expect to lose this year to return fraud will occur around Christmas.
The trade group annually polls senior loss-prevention executives to gauge the level of return fraud, which can vary in complexity from sophisticated attempts to forge store receipts to simply pulling a discarded sales slip from the trash, shopping for the most expensive items listed, then taking them to the return desk for a refund — without having purchased anything.
Asked to check off the kinds of fraud they saw this year, more than 96 percent of the responding retailers said they were approached for refunds on stolen merchandise; 84 percent told the NRF that refunds were sought on merchandise bought with bad checks or stolen cards; and nearly 65 percent reported falling victim to “wardrobing” or “renting” — the return of an expensive dress or electronic gadget after it had been worn or used briefly.
“Innocent consumers often suffer because companies have to look for ways to prevent and detect all types of crime and fraud in their stores, oftentimes resorting to shorter return windows and limitations on the types of products that can be returned,” Rich Mellor, the NRF’s vice president of loss prevention, said as the group released the 2012 Return Fraud Survey.
Years ago, when I worked weekends during college on a retailer’s customer-service desk, I don’t recall being schooled on return fraud. I wonder now whether I enabled “wardrobing” or “shoplisting,” as the scam of using a discarded receipt is known, or “price arbitrage” — the purchase of two similar items with different price points, repackaging the cheaper item in the more expensive item’s box and returning it for a refund; the more expensive item then is sold off online.
Those and other fraud techniques are outlined in a white paper published last year by The Retail Equation, a California company that developed software to help retailers recognize return fraud. (It also uses the numbers in the NRF annual fraud survey to offer advice to retailers.) The software tracks the return-exchange behavior of consumers at participating stores — some 17,000 in its system — by comparing it with patterns used by fraudsters and flagging suspect activity. (A consumer’s profile is built every time he presents a receipt or a driver’s license — when a receipt is lacking — for a refund.)
For retailers worried that a focus on return behavior might be off-putting to consumers, the white paper reminds them that three-quarters of shoppers never return anything and just 1 percent to 2 percent of the remaining group “are netted for fraud.” You’d better hope, though, that none of the latter is in line ahead of you as you make your way, post-Christmas, to the return desk. Otherwise, your queuing might be lengthy.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily those of the newspaper. Reach her at email@example.com.