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Be Merry and Wary

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The holiday season is filled with many good things for retailers. Still, as sales soar there can be an unfortunate downside -- return fraud. Savvy fraudsters know how to prey on holiday cheer, costing retailers thousands of dollars in fraudulent returns and exchanges.

The printed receipt is often the primary credential that confirms a return transaction’s integrity, but it doesn’t eliminate fraud. Even the best POS systems are vulnerable to improper use of receipts that appear legitimate. Here are four ways consumers cheat with a seemingly valid receipt:

Renting/Wardrobing: Buying merchandise for short-term use with intent to return -- video cameras for weddings, big-screen TVs for a major sporting event or a dress for a special occasion -- is a form of fraud. Return abuse -- excessive violation of a retailer’s return policies -- is often viewed subjectively. No one wants to deter a good shopper, but at some point a person’s returns overwhelm the value of her purchases.

Shoplifting with a receipt: Many thieves will shoplift with the intent to return the item for full retail price. The classic example: A fraudster makes a purchase, takes the item to his car, returns to the store immediately with receipt in hand, selects another of the same item from the shelf and proceeds to the return counter claiming he “changed his mind.” The receipt is valid and the return looks legitimate, but the retailer has essentially paid this person for keeping his merchandise.

Returning old/damaged merchandise: The process for fraudsters is simple: Buy to replace an old/broken item. Keep the new, return the old. This system uses the retailer to keep personal items “up-to-date” at the retailer’s cost.

Shoplisting: Also known as “shoplifting using found receipts,” fraudsters shoplist by using a discarded or stolen valid receipt as a shopping list to find items in a retail store and return them for a refund.

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