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The Dark Side of E-receipts

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E-receipts can be convenient to shoppers, and there’s an accompanying feel-good “green” factor, as well. But new research from The Retail Equation suggests there’s a dark side to this fast-growing trend that could have serious fraud and loss prevention consequences.

Tom Rittman, vice president of marketing for The Retail Equation, insists that significant merchandise return process changes must be addressed by retailers prior to implementing e-receipts.

“Imagine the risks presented by same-day returns for a retailer using e-receipts and polling transactions nightly,” Rittman says. “A digital receipt can be transmitted instantly to multiple mobile devices across the city [or farther] and re-printed on all means of paper with no control by the retailer. Now, retailers can be hit with rapid and massive return fraud before having time to react. With e-receipts, retailers are more susceptible to organized retail crime.”

In short, e-receipts are easy to transmit, easy to alter, susceptible to cloning and forgery and hard to permanently delete once saved to storage media -- making established LP practices focused on physical receipts obsolete. For years, paper receipts have been vulnerable to fraud. Now, Rittman maintains e-receipts could potentially worsen problems. The receipt is no longer the only indisputable evidence of a transaction.

Rittman offers two practical solutions retailers can use to combat the threat of fraud: implement more frequent polling and use a return authorization tool that is consumer behavior-based, so it doesn’t just rely on a receipt -- in paper or electronic form -- but rather measures the consumer’s entire purchase and return history to ensure they are not perpetrating fraud.