Methods of Retail Return Fraud

Return fraud occurs when a person steals merchandise from a retail store and then returns it to receive cash. Additionally, another form of return fraud is “free renting” which occurs when individuals purchase an item, use it for some time, and then return the product. It even happens online, with giant retailers like Amazon announcing a crackdown on accounts that yield too many products. Around 95.2 percent of retailers have been targets of this crime over the past year.

According to the National Retail Federation’s Return Fraud Survey, thieves target retailers that have more relaxed return policies. Large department stores that take back items without asking questions and online megastores like Amazon can implement many strategies to prevent such fraudulent activities in the future.

Common Types of Return Fraud

For retail stores to stop falling prey to return fraud, the scam must first be recognized. There are certain types of return fraud that are extremely common. They include the following:

  • Returning previously stolen merchandise. In some cases, the individual may have simply picked up merchandise right in the store and walked up to the return counter immediately afterward.
  • Returning merchandise originally purchased using counterfeit cash.
  • Returning used merchandise to the store.
  • Presenting a fake or false receipt to the cashier to receive money.
  • Returning previously-exchanged items. This can happen when a person buys an individual item and then replaces it with one that is broken in the box in which it came and then returns it.

Store owners, managers, and staff members should know the signs of return fraud. The key is staying aware, checking each purchase, and following company rules for proper returns and exchanges. Keep an eye on your customers, cameras, and double check any receipts handed to you. If anyone working in a retailer suspects something, they must report it to their management team. It’s possible to get law enforcement involved if the fraudulent activity breaks the law, like when an individual steals an item or offers up fake bills to pay for their purchase.

How to Stop Return Fraud

Companies should always think about customer service while creating a return policy. The best kind of return policy is one that is fair to both customers and the retailer itself. There must be an appropriate balance of the two. Shoppers want to easily be able to make returns when they have to and don’t want consequences for doing so. Here are a few ideas to make your store more secure:

  • Require a receipt for returns and exchanges
  • Limit the number of exchanges per customer
  • Keep track of clients and their transactions with a customer database
  • Allowing only store credit rather than giving cash or credit returns
  • Implement weekly cycle counts rather than waiting for inventory to make sure your store isn’t the victim of a fraud scam
  • Use loss prevention SaaS programs

Any business that catches either an employee or a customer engaging in fraud can press charges against that person.

Call a Criminal Defense Lawyer

Being accused of committing return fraud can carry a multitude of consequences. Call a criminal defense attorney that can help you stay safe. This is a white-collar crime and considered a misdemeanor in the state of Florida. With the right defense, you can avoid the devastating consequences that come with criminal charges.

The Umansky Law Firm has over 100 years of combined experience defending all types of theft crimes. Our attorneys will defend you against any large corporation that likely has a host of lawyers on their side. Call us today for a free consultation at (407) 228-3838.