Transactis

It’s amazing what crawls out when you start looking under rocks…while researching the extent of retail fraud in the UK, I found the following forum post – proof that fraudsters are actively targeting retailers and openly discussing how best to take retailers for a ride. In the post, the enterprising would-be fraudster is asking fellow forum members which consumer goods are best to use for committing return fraud:

Ok so my friend’s hairdressers associate that he met once on a staircase would like to raise some cash by shoplifting, returning, buying gift cards with the store credit and then selling the gift card to plastic jungle.

He wants to know which items would be best to do this with, preferably moderately priced items (10 to 30 pounds) that would be easy to steal and easy to return, these items should not be tagged and should be typically in a low shoplifting area of the shop. e.g. kitchenware.

I’m trying to think of more examples but having difficulty, which is the reason I decided to make this thread, ideas people PLEASE!

What follows is a host of “top tips” on what to return, and also on this site are various other threads, covering things like which retailers have the best (for the fraudster) returns policies, return fraud online and even a detailed “How to commit return fraud”. It’s like eHow for fraudsters. I was astounded how brazen people can be when they are confident they can get away with it. One post discusses why the Xbox 360 isn’t a good bet for return fraud, with one response saying “This should probably be in the shoplifting thread, but anyway” – nice to see the moderators are attempting to police their forum!

This shows that retailers are being deliberately targeted for returns fraud – in this case, face to face returns in the store. This kind of scam, along with fraudulent returns for goods purchased online or by mail order, contributes to the massive (and yet largely ignored) overall cost of return fraud for retailers – something estimated to be costing over $13 billion for US retailers in 2010. According to the Retail Fraud Survey 2011, false or fraudulent returns also represent a significant problem for UK retailers and average 0.17% of sales and almost 20% of total shrinkage. No wonder return fraud has been dubbed “The biggest crime you’ve never heard of” !

The challenges faced by retailers when it comes to tackling fraud losses are numerous, especially now the fraudsters can go online and share detailed advice on how best to commit these crimes. There’s a fine line between maintaining goodwill with genuine customers and making sure fraudsters like these don’t get chance to fleece you.  I’m looking forward to sharing these and other war stories with everyone at Retail Fraud on The Road next month.