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$1.5 Million Bar-code Scheme Bilks Wal-Mart Stores

nomrniceguy writes "Two couples have been charged in a price-switching scheme that allegedly defrauded Wal-Mart stores in 19 states of $1.5 million over the last decade. Authorities said the scheme involved using a home computer to produce UPC bar codes for cheaper products and slipping them over the real codes on high-priced items. The suspects then allegedly sold the merchandise, or returned it for refunds or store gift cards that also were sold."

26 of 618 comments (clear)

  1. Is it that simple to make UPC codes? by thewldisntenuff · · Score: 1, Informative

    One would assume it would be pretty hard for your Joe Sixpack to go out and just print these things willy-nilly. How hard is it to make these things? TFA doesnt say anything, but were they using pre-existing UPCs and copying them, or is it relatively easy to forge/copy UPC codes to ones liking...

    Furthermore, Im suprised they werent caught earlier. Itd be pretty damn hard to get those past some sort of return. Hell, I took a DVD back to WalMart after Christmas and they wanted my drivers license number (I left the tin foil hat at home :) ), so one would assume they would have gotten caught sooner.....

    -thewldisntenuff

  2. Re:Doesn't add up by cmallinson · · Score: 2, Informative
    They would only be able to return something with the same code and so they would be given the same refund anyway

    They probably returned the items without receipts. Many stores will give only store credit, or gift cards in the amount of the lowest sale price for the item when it is returned without a receipt. They still would have made money, and that would account for them having gift cards to sell.

  3. Re:Doesn't add up by trs9000 · · Score: 5, Informative

    The receipt first of all has the wrong item, and secondly says it was only purchased for $10. Even if they are dumb enough to mistake the plasma television for a toaster, wouldn't they only get their $10 back?

    Yes, in theory. However, one of the reasons my mom loves walmart (and i cant really argue this point) is that they will take *anything* back. No receipt? Fine! Got it somewhere else? No problem! You broke it?! and coughed on it and it's a food product?!! Sure, we'll take it back! They are very accomadating with returns.

  4. Re:Doesn't add up by mondaypickle · · Score: 3, Informative

    Most of the self check-out things weigh things after u scan them to make sure its the right item, so this wouldnt work on self check-out machines

  5. Re:Doesn't add up by iocat · · Score: 2, Informative

    This is exactly how this scam works. They busted some people who were doing this at Home Depot around San Francisco (San Leandro and Emeryville, I think, if you want to be specific -- read the article), using a bar code for a really cheap light fixture and putting it on a much more expensive fixture (by $150 or so). They did the same thing with sinks, too. They'd buy like 10 at a time along w/ a ton of legit stuff, then sell the legit stuff to a contractor and return the light fixtures for the higher price. If they couldn't get cash (because they had no receipt) they'd get a gift card and sell that for a slight discount elsewhere. The scam netted them maybe ~$400K over 18 months. Check out the link, it's a pretty interesting story.

    --

    Dude, I think I can see my house from here.

  6. Re:Doesn't add up by Gordonjcp · · Score: 2, Informative
    My girlfriend worked in a couple of supermarkets when she was a student. She checks every receipt carefully for mispriced or mis-scanned items. Apparently it's really easy to get ripped off by incorrect pricing, but no-one ever checks.


    Of course, she takes the piss out of me because I look at every receipt to check the print quality, but that's because I do tech support for most of the UK's supermarkets...

  7. Re:relapse by SuperIceBoy · · Score: 2, Informative
  8. Re:Doesn't add up by idolcrash · · Score: 2, Informative

    The weight thing doesn't seem to actually measure the weight, it just makes sure something is there. I always put stuff there when I'm buying and it doesn't touch or something I just push down with my hand and it works.

  9. Re:It's even simpler than that. by H0NGK0NGPH00EY · · Score: 5, Informative

    Oh, one more thing I forgot to mention. This wasn't available 10 years ago of course, but now you can just write the number under a UPC code down, then go to Google and type it in, and viola, auto-generated UPC graphic, ready for printing. Try it out.

    --
    Do not read this sig.
  10. Re:Doesn't add up by Anonymous Coward · · Score: 3, Informative

    It's also likely that the employees just didn't care enough to make a fuss about it.

    It actually has nothing to do with caring. I worked at a grocery store for quite a long time earlier this year, and store policy, it seems for most retail stores is not to do anything to interfere with a customer who is shoplifting, ripping you off, ect. Furthermore, the customer is always right rule still holds. The only time a lowly checker is supposed to even consider doing anything is if the manager instructs them to do so. And since they are told to wait until after it's over to notify the manager, and they probably didn't goto the same cashier twice, it's not hard to not get caught doing it (although, they did it too much, and eventually did get caught).

  11. Re:Use similar items by Anonymous Coward · · Score: 1, Informative

    While this not certainly impossible the standard UPC is actually fairly sharpie-resistant. First, the bands are either wide or narrow, but with a sharpie all you can do is make narrow bands wide. Moreover, the encoding switches from black on white to white on black in the middle, so the scanner can easily determine which direction it's reading. This means that you'll have to find the mid-point of the code and change your method from making narrow black bands wide to making wide white bands narrow. Again, possibly but annoying to say the least.

    Another problem is the design of the numbering scheme. The first half of the number is assigned per-manufacturer in an orderly fashion. The second half is supposed to be randomly assigne for each product (as opposed to matching the model number). Therefore you'll probably want to change the last half, and you'd have to know another UPC that existed in the POS system, or the item wouldn't scan. And you'd have to be able to make that change simply by adding black lines.

    Another problem comes from the embeded checksum (for detecting read errors, not tampering). You'd not only have to create a new code that existed in the POS system but you'd have to find one that either had the same check-digit (1/10 chance) or that had a check-digit that could be adjusted simply by adding black lines.

    In short, just print new lables. It'll save you a lot of time.

  12. HOWTO: print your own barcodes with linux by lkcl · · Score: 4, Informative

    1) install debian
    2) install a thermal label printer (the dymo 310 is nice)
    3) install pbm2wxl if using dym310 (use google to locate)
    4) type "apt-get install barcode"
    5) run echo thebarcodenumber | barcode | lpr -Pdym310
    6) when the local law enforcement agencies come knocking on your door claiming that the GNU barcode program is illegal and subversive software, RUN LIKE HELL!

  13. Re:Doesn't add up by eln · · Score: 2, Informative

    Large items don't usually carry the little theft prevention devices that trigger the annoying "You have activated the Wal-Mart Inventory Control System" thing when you walk out, because they're too big to rub over that rubber thing by the register that deactivates the device. Thus, the only way to make sure you paid for it is for the door greeter to check your receipt. In short, the only time the greeter will ever do that is if you have a large piece of expensive equipment in your cart.

  14. Re:Wal-Mart, the apotheosis of mediocre consumptio by thegreat682 · · Score: 2, Informative

    Sometimes, it is impossible to not shop at WalMart. I never really noticed this until I went to college and began driving out to some of the small towns neighboring the school. There are areas where WalMart has monopolized all business, others are just unable to compete. In some of the places that I have been, the only place to get your groceries and other supplies is WalMart. There is nothing else.

    --
    Hard Hat Area: Sig Construction Zone
  15. Re:idiots + crime = caught by __aafkqj3628 · · Score: 3, Informative

    Romeo & Juliet, Act 2, Scene 4 -

    Nurse
    Is your man secret? Did you ne'er hear say,
    Two may keep counsel, putting one away?

  16. Re:Self-checkout fraud possible by Rie+Beam · · Score: 2, Informative

    The Self-Checkout system has always struck me as a bit abusable. One thing I've always noticed at my local check-out station is the ability to cancel a purchase midway through - of course it requires the approval of the cashier at the machine, but they usually don't give a damn. Maybe I'm ignorant, but if you cancel the purchase after scanning half of your items, what are you left with? Are the items technically "purchased", or is there some kind of de-activation scheme on those items I'm not aware of?

  17. Re:Doesn't add up by welshie · · Score: 2, Informative

    Self checkouts, or at least, the ones I have used, will weigh the output in the bagging area, and compare the added weight to the weight as declared in the shop inventory system. That stops you buying two litres of milk and tagging it as one litre, however, it wouldn't stop a 512MB flash card instead of a 256MB flash card. Mind you, the self check-outs that I've used will know that certain items (like 20 year old single malt whisky) are security tagged, and will automatically signal assistance from an attendant. Flash cards would probably be security tagged; hell, I've even seen a pack of two AA batteries security tagged - they're far too easy to pocket.

  18. Re:Shady, but probably legal by jcr · · Score: 3, Informative

    The new pricing (bar code) can be viewed as a counter-offer. If the cashier accepts, the counter-offer is accepted and a contract is entered, making it a legal sale.

    Clever argument, but the chances of a court going along with it are about the same as the proverbial snowball's chance in hell.

    -jcr

    --
    The only title of honor that a tyrant can grant is "Enemy of the State."
  19. Re:Doesn't add up by Anonymous Coward · · Score: 1, Informative

    According to TFA they ran this scam across 19 states -- makes sense... there's no way you could keep returning big-ticket items to the same store everyday without raising a lot of suspicion - you'd have to move around to keep the scam going at the scale they did

  20. Re:Shady, but probably legal by TiredGamer · · Score: 3, Informative

    Except there is no legal representative of Wal-Mart Stores, Inc. at the time of sale. The cashier is a customer service representative that is aiding you at the time of sale with the computer transaction. The offer of sale is made at the shelf and by completing the transaction at the point-of-sale you are accepting the offer of sale and completing the terms of the contract. At no time can you negotiate the sale unless you approach a Customer Service Manager, in which case you lose any sort of advantage since they are actually semi-knowledgable.

    --
    No penguins were harmed in the making of this post.
  21. Re:Doesn't add up by rah1420 · · Score: 4, Informative

    I just can't see them having the weights of every single purchasable item in the database.

    If they're doing Item Data Sync (and I know for a fact Wally World is, along with some other retailers -- since they're doing it with my employer) not only do they know the price, the UPC code, the weight, the color, but they know the inner pack (how many in a "multi-pack" if any,) how many per case, and the cube of the item so that they know how much volume the item will take up in the truck and how much real estate it will consume on the pallet. We have Logistics Strategy Analysts who think it's a Good Day (tm) when they can get a truck that gets closer to the nirvana of 4000 cube (which is the theoretical capacity of a 53' trailer.) The cube data that is provided by Item Data Sync allows them to max out shipments without "weighing out" (being overweight) or "cube out" (being too big to fit on a single trailer.)

    It's a trivial matter to send this weight data to a checkout scale.

    --
    Mit der Dummheit kämpfen Götter selbst vergebens.
  22. Re:Doesn't add up by dsmitchell1 · · Score: 2, Informative
    As a former Wal-Mart cashier (I worked there for one summer between getting my BA and starting grad school), I can tell you that the two things that matter most are (in no particular order):
    • How fast you scan items
    • Making sure that you don't make any customers mad
    I, for one, hardly ever paid any attention to what was coming up on my screen, and when I did, it was often pretty incomprehensible (their displays don't show too many characters), so as long as they didn't try to purchase a TV for $2 or something like that, it's not likely that a cashier would notice.
  23. Someone tried this with me once... kind of. by cvd6262 · · Score: 4, Informative

    When I worked at REI (Camping, climbing, etc, gear), we were always told to handle the merchandise ourselves. A customer once came to my register with a large internal frame backpack, and instead of handing it to me, he just pointed the pricetag at me. I grabbed the sac out of his hands and said, "Hmmm. This seems a little heavy." At which point I opened it and found a $110 rope. They guy was totally pale and muttered, "Huh. I wander how that got it there." I asked if he wanted to buy it and he said, "no," so I rang him up for the backpack and restocked the rope.

    More on topic, this was something that was part of the training. they taught us how to find fake pricetags, hidden items (carabiners in shoes, tents in backpacks, etc.), and a whole bunch of other tricky stuff. It goes to show that if you don't pay for good training up front, you'll pay for it later.

    --

    I'd rather have someone respond than be modded up.

    1. Re:Someone tried this with me once... kind of. by whiskeypete · · Score: 2, Informative
      Guilty until proven innocent, huh ? Nice...


      No, Guilty only when proven guilty. The clerk didn't necessarily assume anything before picking up the backpack. He just followed standard procedure.

      Saying that checking the product is assuming guilt is like saying the doctor is assuming you are sick when he takes your temperature.
  24. Re:Burger King and Super Mario by tepples · · Score: 2, Informative

    Smash Bros. was on NES before it was on N64. There existed adapters to run NES games on Super NES.

  25. Re:Doesn't add up by bsane · · Score: 2, Informative

    Of course the parent said he paid 5.50 for the DVD, and speculated that it would have taken up to an hour. That would make it $25/hr...