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AZ White Mountains Podcast

Sep 24, 2015

Detective Johnson of the Show Low Police Department talks about a Fraudulent activity that is costing the Mountain money.


Return fraud

From Wikipedia, the free encyclopedia
Return fraud is the act of defrauding a retail store via the return process. There are various ways in which this crime is committed. For example, the offender may return stolen merchandise to secure cash, or steal receipts and/or receipt tape to enable a falsified return. Return abuse is a form of “friendly fraud” where someone purchases products without intending to keep them. Perhaps the most well-known form of this abuse is “wardrobing” or “free renting” – in which the person makes a purchase, uses the product(s), and then returns the merchandise.

There are various types of "return fraud", which impose large costs on retailers.
The retail industry experiences a significant fraud and abuse problem, losing money in the range of $9.6 to $14.8 billion per year, according to studies conducted by the National Retail Federation (NRF) and the Loss Prevention Research Council.[citation needed]

The problem has historically caused retailers to raise prices for shoppers in order to offset and recover the losses incurred from fraudulent returns. Alternatively, many stores have created stricter return policies such as “no receipt, no return” or imposed return time restrictions such as a 30-day limit on all returns that impact all shoppers.

A certain percentage of returned merchandise must be marked down or discarded in order to sell the product. After being returned, out-of-season clothing may have to be placed on the sale rack, for example. Or retailers may be forced to discard returned lingerie for health reasons. The retail company also incurs restocking time from returns, which could be time an associate spends driving new sales revenue by assisting customers.