Michele Chandler of the Mercury News is reporting:
Retailers stand to lose $3.5 billion from returns fraud during the holidays this year, according to a survey released today by the National Retail Foundation.Link to Mercury article, here.
Criminals are increasingly taking advantage of the holiday bustle and retailers' return policies to get cash for stolen merchandise or return items for a refund after they've been used, according to the first survey on returns fraud by the industry group.
For the year, retailers could lose a total of $9.6 billion because of the practice.
I do firmly believe this is a "BIG" problem, but what isn't mentioned in these surveys and news articles is that a lot of refund fraud comes from within, or is the result of an "inside job."
Quite simply - one of the easiest ways for a dishonest employee to steal cash is to do a fraudulent refund and pocket the proceeds. That way a "cash shortage" doesn't show up in their till.
Another recent concern is the amount of personal information to issue these refunds. Storing all this information could create the risk of data breaches - and as I have written before - the insiders and professionals routinely use "other people's information" to get past all these security procedures.
Bottom line is the "message is clear from the retail industry" -- honest people better hold on to their receipts if they expect to get a refund.
I'm glad the industry is protecting themselves and hope they are taking measures to protect the customers who aren't stealing by using good judgment and protecting all the information they are maintaining in databases.
I also hope this will allow them to focus their security resources on "insiders," who might be a big part of the problem. Whenever people steal, the cost is passed on to all of us.
As for my recommendation - hold on to your receipts and be careful of what information you give out that gets stored in data bases!
On a lighter note, it might surprise you who is behind retail refund fraud, here is a previous post on someone, who surprised a lot of people:
Former Bush Advisor Arrested on Shoplifting Allegations