Get-tough policies aimed at fighting retail larceny

Retail organizations and law enforcement agencies suggest that gift recipients wanting to make gift returns during and following Christmas be prepared to comply with stricter return policies.

A study conducted by the National Retail Federation estimates that both large chain stores and small businesses will lose approximately $3.48 billion in return fraud this holiday season.

Thanks to enhanced return policies and security measures, more than 12 percent of major retailers anticipate losses will be down nearly 7 percent this year from $3.73 billion in losses taken during the Christmas season of 2010.

Annual return fraud cost retailers $14.37 billion thus far in 2011, a 5 percent increase from the $13.66 billion lost in 2010.

When talking about retail larceny, industry insiders contend this goes beyond the idea of simple shoplifting, although that practice is often included in return scams.

Return larceny can involve gifts stolen from homes and taken to stores and returned for other products or, more commonly, store credits and cash. Criminal efforts may also include bringing in counterfeit products in hopes of fooling clerks that are swamped with business activity, people altering price tags and even employees giving items to family members and friends with the intention of returning the product later for personal gain.

Many retailers are now taking measures, including receipt and picture identification requirements, and incorporating those and other steps into return practices.

“Those who think they will be able to get away with manipulating a company’s return policy will be sorely disappointed this holiday season,” NRF Senior Asset Protection Advisor Joe LaRocca said. “Retailers have been putting checks and balances into place to prevent people from taking advantage of stores’ return policy, which raises prices for honest shoppers.”

Terrebonne Parish Sheriff’s Office Chief of Detectives Maj. Corey Bergeron said he is not certain how frequently return fraud takes place in the Tri-parish region. “We really don’t get a lot of it here,” he said. “I wouldn’t say it is very common here, but I am sure there are cases we have worked in the past. The majority of that is handled on the patrol level.”

According to the NRF, 89 percent of retailers confirm they have had stolen merchandise returned to them during the past year. Employment involvement in return fraud was also reported by 89 percent of surveyed stores.

More than 81 percent of retailers asked said they experienced having return merchandise presented that had been purchased on fraudulent or stolen cash and credit or gift cards.

One Houma retail-based security expert, who did not want to be identified, said it is common for some criminals to shoplift at one store location and return products to a different location owned by the same retailer. He added that this practice is a year-round occurrence.

Tagging Efforts

AGITS LLC specializes in merchandise tagging and takes advantage of technology to deter retail larceny.

Information provided the example of retail return fraud by noting shoppers that will purchase a designer garment from a major department store then go to a discount retailer and purchase the same item for significantly less. The perpetrator then will place the high dollar price tag on the item purchased for less and take that product to the major department store with intention of returning it for financial gain.

Return policies, AGITS noted, are often filled with vulnerabilities making return rip-offs a crime of opportunity. Weaknesses include retailers not requiring store receipts or setting deadlines accepting returns.

A sampling of major retailers and their return policies follows.

• Best Buy

Electronics retailer Best Buy begins specifying its return policy by designating deadlines. Consumers have 14 days from the original purchase date to return computers, monitors, projectors, camcorders, digital cameras, iPads, tablets and detectors. Returns on all other store merchandise must be made by 30 days after the purchase date. Best Buy Reward Zone Program Premier Silver members have 45 days after date of receipt to return any product.

Non-refundable items found on one’s receipt include labor, delivery and installation charges; pre-paid cards for music, photo, video or phone cards; digital content; Pitch In card contributions; consumable items such as food, drinks or batteries; damaged and abused items; products missing accessories such as remote controls, cords and cables; etched or personalized items; opened computer software, movies, music and video games.

Identical item exchanges are accepted, but cannot be returned for a refund.

Best Buy is among the retailers that require the presentation of photo identification for a return to be accepted.

The store also has separate policies for the return of mobile phones, plans and rebates.

• Home Depot

For most merchandise, Home Depot accepts returns 90-days from original purchase. Damaged or shortage claims are to be made within 30 days of purchase, and the receipt or packing slip is required for all returns.

Damage to appliances must be reported within 48 hours of delivery, and utility trailers are not returnable.

Gift cards are non-returnable and cannot be redeemed for cash in most states.

• Target

Target stores require that all returns be made within 30 days of original purchase. No cash refunds or store credits are given. All exchanges are processed through Guest Services. Purchase records and packing slips are recommended to be kept as documentation, and wrong sized clothing can be exchanged for a different size on the same product.

• Wal-Mart

The world’s largest retailer, Wal-Mart, specifies that most store items can be exchanged or refunded with a store receipt within 90 days of purchase. A cash refund option is offered for items priced under $25. Gift cards, valued at more than $25, may be exchanged for merchandise with a total price of the corresponding card amount.

Merchandise ordered online can be returned to a local store within 90 days of original purchase. Shipping costs are not refunded unless there is an error on the retailer’s part, and even then only as a credit to the total order.

Wal-Mart, like most retailers, requires items to be returned in original packaging.

The NRF has identified return fraud as a “growing problem” that has forced many retailers to adopt policies that require more preparation from consumers.

LaRussa credited retailers as having made significant progress by reducing fraudulent returns by adjusting their policies. He noted that retailers have estimated more than 14 percent of returns to be fraudulent and that although it means extra effort on the part of honest consumers, more than 88 percent of shoppers surveyed in early December said they considered return policies to be understandable and fair.