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

Posted by samzenpus on from the your-total-is-one-dollar dept.

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."

16 of 618 comments (clear)

  1. Doesn't add up by jardin · · Score: 4, Interesting

    If they were rung up as lower priced items, then wouldn't it show the wrong items on the cash register/receipts? I don't understand how the cashiers didn't catch on. And how did they go about returning these items when the wrong items (and prices) were printed on the receipts?

    1. Re:Doesn't add up by petecarlson · · Score: 4, Interesting

      Perhaps they printed their own recipts with the right item and price. I did this once at best Buy when I needed a recipt for a cell phone that I had bought the stupid insurance for. The reciept had faded to the point where it was hardly legible. They told me it wasn't valid because they couldn't read it. I went home and printed a new recipt with a thermal printer and took it to another store where they replaced my phone.

    2. Re:Doesn't add up by BinaryOpty · · Score: 5, Interesting

      The possible reasons why the cashiers probably didn't notice are: 1. they don't care enough to name-match things they're scanning, 2. they didn't speak/read english well enough to know the difference, 3. the couple selected objects that had multiple versions spanning a price range (like buying a 512MB flash card with the price of a 128MB one), and 4. they used self checkouts (once Wal-mart implemented them). If they did bilk Wal-mart out of 1.5 million, then I'd say at least one of the four above were true at some point in their spree.

      On the returns side, if they returned it for refunds sans reciept (like most stores will allow around Christmastime) then they could possibly do return them to make money.

    3. Re:Doesn't add up by TrentC · · Score: 5, Interesting

      I used to work at Fry's Electronics, and we had a pair of thieves who did this.

      They'd paste the UPC of a lower-priced item over the sticker of a higher-priced item of similar make (handhelds were good for this). Even if the checker was looking at the display, you might not catch the fact that the model numbers on the PDAs didn't match. The guys at the door didn't always catch it either.

      Basically, they took advantage of two things at my location: the fact that relabelling items that had price changes did not always happen 100% (the result being that sometimes an item scanned at a different price than was ont he sticker; and believe me, I handled plenty of customers who complained that the CD/DVD/software that said $19.99 on the sticker rang up at $29.99) and the fact that many items Fry's purchased were often bought at clearance or through a special arrangement, so oftentimes the items had custom stickers over the original barcode.

      So you have A) items that legitimately had UPC stickers on them, and B) items that scanned at different prices. It was a recipe for disaster; we only caught them when someone noticed them sticking a label on a product.

      Jay (=

    4. Re:Doesn't add up by shufler · · Score: 5, Interesting

      It should be pointed out that this is in fact, honest to goodness Wal*Mart policy. The official Wal*Mart literature and training clearly states it's their policy to take back ANYTHING. The reasoning they give is that a happy customer is a returning customer.

      Ask anyone who's worked there long enough, and they'll tell you all sorts of stories about people returning things which they don't even carry. Inventory time becomes hilarious in a very unhilarious way.

      The policy doesn't extend to everything though. I belive things like CDs and DVDs can only be exchanged for the same item. It should also be noted that opened murchandise isn't resold, and that stores will donate a certain amount to charity. The rest is thrown in the trash compactor.

    5. Re:Doesn't add up by NevermindPhreak · · Score: 4, Interesting
      1.5 million / 10 years / 365 days / 4 people

      an average of just over a hundred bucks a day per person. shouldnt be too hard, espically once you get your shit together, to keep up that type of scam rate.

      also, you have to figure in the fact that any loss prevention team is going to quote any damage estimate at as high as possible. when i was younger, me and some friends tried to rip off walmart in the same way, except we just cut the UPC from one product and put it on another. trust me when i say the cashiers could really care less. however, we were busted by some undercover shoppers in the process. we put a $20 UPC on a $30 product, but the police report quoted $50 worth of stolen property.

    6. Re:Doesn't add up by roie_m · · Score: 3, Interesting

      No, because they didn't try to steal the $30 product, they tried to pay $20 for it. By your calculations, they stole $20+$10=$30.
      But, when someone else went to buy the original $20 item, they probably just looked up the price and charged them $20. The real value of the steal was $10+(five minutes of some cashier's time at minimum wage)

    7. Re:Doesn't add up by drawfour · · Score: 4, Interesting

      I worked at Wal-mart during college. I worked in the Sporting Goods department -- so I sold ammunition and guns. Ammunition is something that you are NOT allowed to resell once it has been returned -- it's an explosive, after all. Well, wouldn't you know it, but we would accept returned ammunition with a smile on our face. Luckily we never restocked it... instead we donated it to the local police department. It was a tax write-off, and the local PD got plenty of ammo for target practice and stuff. But it was plain stupid to accept a return on an item that we knew we would not be able to sell again and that we couldn't return to the manufacturer (defective items are returned with usually no problems). But we did it to keep people happy...

  2. Too bad Re-code.com isn't still around! by cdf12345 · · Score: 4, Interesting

    I saw the guys who did Re-code.com at 2600's 5th hope this summer in NYC. Basically you could create a barcode for any item, and print them.

    Finally they closed down because of pressure from walmart and huge legal fees needed to fight them.

    But they got their point across, so I could see someone doing this quite easily. Now I'm wondering how they got caught.

    I think the best thing to do it go to a walmart and just sticker random items, so that random people are buying the altered items.

    There's a 10 min video on Re-code.com about the case. It's worth a quick viewing.
    Seems like a way to say "I didnt put the sticker there!"

    --
    Chicago2600.net more than a lifestyle, its a survival trait.
  3. Self-checkout fraud possible by turtlboy · · Score: 5, Interesting

    I worked at a Wal-Mart for a while as a cashier. Our store had 4 self-checkout machines where you ring up the items yourself. One cashier was assigned to "Paystation" where people could pay with checks, and other assorted stuff the machines couldn't handle. When working at the Paystation, you were given a barcode card which when scanned would bring up an admin-like menu with price override options and other assorted "cashier" tasks. At one point, I scanned that barcode at my register, printed a receipt to show the number it represented, took that home and recreated it on my computer and printed a new version. I taped it on the back of my name tag, and it worked like a charm. Here's the scary thing: Cash Office also used a barcode for those machines to refund money, etc. They could literally empty the machine of cash with their card. If one took a picture of their card (which usually was worn around the neck in plain sight), it wouldn't be hard to recreate the bar code without knowing the numbers. Talk about fraud potential... I almost wanted to do it as a proof-of-concept, but thought that just being caught with the barcode would get me in big trouble, so I didn't end up trying.

  4. Let the buyer be aware! by Homer's+Donuts · · Score: 3, Interesting
    Reminds me of the stories in the early 70's of people changing their utility bills. Bills came printed on punch (IBM, Hollerith) cards.

    "Enterprising" students would run them thru keypunch machines and make the number negative or add a decimal point.

    These machines are also the origin of the "hanging chad". Always check your input. Like the state of Florida, Walmart could have caught this by auditing returns.

  5. It's even simpler than that. by H0NGK0NGPH00EY · · Score: 4, Interesting

    It's even simpler than that. One summer about 8 years ago when I was in high school, I sat down and decoded the UPCs of a few products in an afternoon. Once you know what the codes are, it's trivial to draw your own bar codes using MS Paint. You can then print them off using any old ink-jet printer. Don't believe me? This is the page that I wrote up after figuring it all out. I made the UPC graphics on that page using just Paint. I also printed off some test barcodes using the cheapo inkjet we had, and ran them by the "price checker" thingys in the local Target. They scanned no problem.

    I've wondered for years whether it would really be that easy to get away with switching UPCs just like this. I guess the answer is "pretty easy." Of course, if you get as greedy as these people did, you're obviously going to get caught before too long.

    --
    Do not read this sig.
  6. GOOD policy by Anonymous Coward · · Score: 3, Interesting

    I love that about walmart. It's because of that that I am a returning customer.

    I remember when they tried to force me to use a TI graphing calculator in middle school. I used my HP for the most part, just as long as I had the TI with me the school didn't complain. But I've never had an item break as much as that TI, and each time it broke I just brough it back to Walmart. Seriously, a little bump on part of the screen and the thing would shatter. One broke when I slid the case on at an odd angle. Fuck you TI! I love you Walmart!

  7. Shady, but probably legal by Basje · · Score: 4, Interesting

    The pricing on the goods can be constituted as an offer. On accepting the offer, a contract is entered. 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.

    Of course, ethically it is wrong, but legally, it's not done yet.

    --
    the pun is mightier than the sword
  8. Retailers use this for competitive pricing... by switzer · · Score: 5, Interesting

    This method is used to obtain competitive pricing all the time. For example, if Half Life 2 is going on sale at the beginning of the month, and Joe Retailer wants to know how much his competitors are going to charge:

    Just print off the UPC code onto a sticker, and go into a competitor (like Walmart) a week before it goes on sale. Put the sticker onto another game, and ask the cashier for a price check. The scanner computer already has the pricing information in it, so the price that they are going to charge shows up on the register!

  9. Re:Somehow I'm not surprised at quite a few respon by rusty0101 · · Score: 3, Interesting

    I look at most of those posts and think of them in the same sense as posts on how to make a nuclear bomb. There are actually a lot of people who have access to a large percentage of the material as well as the technical knowledge and resources necesary to construct one. You or I may not have ready access to fisionable materials in the quantities and purety necessary, but even if you or I did, that would not make it at all likely that we would create a nuclear bomb.

    Do I have the resources to do UPC label creation and swaping. What I don't already have at home I can easily pick up at a local office max, or office Depot. Possibly even at the very stores mentioned in the article.

    I look at the responses earlier in the listing as "Idiots, if you are going to do this, you need to do it this way..."

    If I were to decide to use UPC relabling at Best Buy to get that great new 42" LCD HDTV, I would visit first, find a manufacture with both a 42" LCD HDTV, and a 35" LCD HDTV, write down the UPC for that 35" edition, go home print up an approprieate sized copy of that to overlay the UPC on the 42" edition, then during a busy time at Best Buy, go in, put the 42" set on a cart, go stand in line, and while waiting in line discreatly overlay the UPC.

    Now note I began that with 'If I were to decide..' I honestly have no interest in doing this. I may like the idea of having a 42" LCD HDTV, but I happen to have worked for the stuff I own, and I have no interest in changing that.

    I don't have a justification for such an action, as I have no interest in performing the action. That doesn't mean that I can't participate in the thought experiment, or write about what I know about the topic in question.

    -Rusty

    --
    You never know...