Christmas Gift Returns to be Monitored for Return Fraud

In efforts to curb gift return fraud, many retail stores have implemented more restrictive return policies. Cross-referencing databases that track “serial returners” before accepting merchandise for a refund is becoming more and more common.

Retailers, reportedly including KB Toys, Express, Sports Authority and Staples, have started using a computer database by The Return Exchange of Irvine, Calif., in order to track customer returns. The process works by stores swiping shopper driver’s licenses when a return is being made, and if the store-set return limit is exceeded, the customer’s return claim is denied. Most stores are not currently posting the new policy for customers to easily access the information.

"To be a good consumer nowadays you have to understand what the rules are and be willing to play by the rules," Marquette University business professor Dennis Garrett said. Adding that, "those rules allow stores to protect themselves against return fraud."

The National Retail Federation estimated return fraud to cost retailers about $16 billion per year.

Garrett said, "while some consumers may not like the idea of having their returns tracked, in the long run it could actually save them money. We should be encouraging this and saying, 'Sure, track my purchases. I don't mind. I'm doing a good job as a consumer. Keep track of those people who aren't doing a good job and get them out of the system.'"