Some major retailers maintain a database of whom to ban from making returns

William Gayde

Posts: 373   +5
Staff member

While almost every major retailer has some form of a return policy, a growing number of stores are keeping track of who makes returns and whether or not they should be allowed to continue to do so in the future. This is all in an effort to help cut down on return fraud which accounts for about six percent of all returns.

Retail fraud is a broad category and includes things such as wardrobing, receipt fraud and price arbitrage. Wardrobing is the practice of purchasing items with the intent of using them for a short time and then immediately returning them, receipt fraud is using fake receipts to attempt to return products for profit, and price arbitrage is the practice of purchasing a cheap item and returning it in the place of a similar, more expensive item.

Industry estimates put loses due to retail fraud in the tens of billions of dollars so naturally, companies are looking to do whatever they can to help stop this. Ten of the top 100 retailers, including Best Buy and Home Depot, have turned to a company called The Retail Equation for help. The Retail Equation maintains a database of consumer behaviors such as how often a consumer makes returns and for what value. They then create a report for the customer as described on their website:

A Return Activity Report is a history of your return and exchange transactions posted in stores using Verify Return Authorization. The report lists return activity information including the stores you have returned to and, for each return, the date and time, whether it was receipted or non-receipted, and the dollar amount.

Using predictive analytics, the company attempts to determine if the return is likely to be fraudulent and whether or not to permit it. This will prevent stores from having to implement stricter return policies. The hope is to ban consumers who return more items than they should but retailers aren't saying much about this policy yet.

As with all emerging technologies, there are many reports of false positives but that is something that will hopefully improve with time.

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TomSEA

Posts: 3,248   +1,878
I don't see a problem with this. There are people out there who make fraudulent returns as their only source of earnings. Because its plenty easy to do and they get a decent return for their few minutes of effort.

Businesses have the right to protect themselves from thievery, and that's all this is.
 

Evernessince

Posts: 5,184   +5,515
I don't see a problem with this. There are people out there who make fraudulent returns as their only source of earnings. Because its plenty easy to do and they get a decent return for their few minutes of effort.

Businesses have the right to protect themselves from thievery, and that's all this is.
Yep. I know for sure that returns spike way up for me when a new graphics card generation is released. I'll get people returning their card purchased up to 30 days ago to buy a brand new card for the same price. It costs money to have that card re-validated as functioning and then restock it. Most of the returns for motherboards are because someone bent a pin. I often take a magnifying loupe to the pins and find bits of fiber/hair, like someone somehow got their shirt sleeve caught on a few of them. The best you can hope for is that after you fix the pins the motherboard works.
 

GeforcerFX

Posts: 952   +442
Ohh I don't miss dealing with return fraud at work. I always checked the product that was being returned, checked serial numbers. People would have a printer break after 6-8 months and wouldn't go through the warranty process, buy a new one and then return the old one in the box. Had people that dropped laptop's try that as well. The best were people that put a completely different laptop or item back in the box, watching the look on there face as I opened the package was always priceless.
 

Badvok

Posts: 315   +162
Grammar nazi: An easy way to check if 'whom' is correct is to substitute 'which person' and see if the sentence still works as intended.
 

Puiu

Posts: 3,939   +2,450
A quick question. Beyond the obvious credit card payments (or online purchases where you put your real name in), how do these retailers know who you are? Do they ask for some form of identification when you buy stuff or return them?
I don't think I've ever given my name when buying something directly from a store with cash money.
 

Uncle Al

Posts: 7,213   +5,600
No problem when them maintaining that database as long as one provision is in force. The customer should be informed BEFORE the sale is final that due to their listing in said DB, they cannot return the item. That would give them the opportunity to correct any errors (just how many John Smiths are out there?) and notify the database administrators (with appropriate documentation) of said errors and have their name removed from the DB. From practical experience I ran into a similar situation many years ago and had to file suite to get the error corrected.
 

Prosercunus

Posts: 282   +124
I returned 4 different monitors to best buy in the span of a few weeks due to poor quality or one being defective. I never felt too bad about it.
 

gusticles41

Posts: 503   +600
A quick question. Beyond the obvious credit card payments (or online purchases where you put your real name in), how do these retailers know who you are? Do they ask for some form of identification when you buy stuff or return them?
I don't think I've ever given my name when buying something directly from a store with cash money.
Speaking from my past experience at Best Buy (where we dealt with this scam way too often) there are 2 ways. First, the "Rewards Zone" program where you earn points that can be redeemed for gift cards is also used to track purchase history. This is also a service to the customer because it helps look up warranties and allows for receipt-less returns.

Second, ID is asked for when making a return for this exact reason.

That being said, it takes some pretty serious abuse of the return system to be flagged. When trying to find a decent home theater sub replacement recently I made 3 returns over the course for a week with no issues. Granted one was defective, the other 2 were just not meeting my needs.
 

mctommy

Posts: 343   +80
A quick question. Beyond the obvious credit card payments (or online purchases where you put your real name in), how do these retailers know who you are? Do they ask for some form of identification when you buy stuff or return them?
I don't think I've ever given my name when buying something directly from a store with cash money.
Most if not all will ask for IDs when you return the item.
 

TheBigT42

Posts: 415   +326
I don't see a problem with this. There are people out there who make fraudulent returns as their only source of earnings. Because its plenty easy to do and they get a decent return for their few minutes of effort.

Businesses have the right to protect themselves from thievery, and that's all this is.
Yep. I know for sure that returns spike way up for me when a new graphics card generation is released. I'll get people returning their card purchased up to 30 days ago to buy a brand new card for the same price. It costs money to have that card re-validated as functioning and then restock it. Most of the returns for motherboards are because someone bent a pin. I often take a magnifying loupe to the pins and find bits of fiber/hair, like someone somehow got their shirt sleeve caught on a few of them. The best you can hope for is that after you fix the pins the motherboard works.
Commodore made the mistake of making their 300 baud modem the exact for factor of their 1200 baud modem. I knew lots of people that swapped the guts.