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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.