Retail Fraud on the Rise

prostoalex writes "They buy the merchandise, print their own receipts, and return it. They buy two watches - an expensive one and inexpensive one, and then swap them and return the one with the highest price. Business Week talks about retail scams, and how merchants are trying to avoid them without losing the customer service battle. They are fighting against surprisingly sophisticated techniques, too." From the article: "Q: What role do auction Web sites play in all this? A: Retailers have stopped giving cash back in many different cases. Instead, they do refunds in the form of gift cards or store credits or store value cards. If a crook can get enough of those, he might sell $2,500 worth of gift cards for $2,000 online. It's a benefit for the buyer, who gets a discount and will use those gift cards. And the person who has manipulated the return-scam system has a way to [make money]. But the retailers lose out. "

Comments

This is unethical

[DotNM]

I feel that it's actually very disgusting that people do this. It can ruin it for everyone by retailers getting burned by activities such as this and deciding not to accept returns or similar decisions. I think it's just a matter of time before many companies decide to allow exchanges only and prohibit returns. If they do adopt the policy of no returns and exchanges only, it should be explicitly signed at the point of sale so that everyone knows before they buy that they can exchange only and not return the products. Where are these peoples' moral compass?

Re:This is unethical

[rossifer]

the answer: there is NO moral compass anymore. People just do what they want.

That sounds like a Christian analysis of secular culture. But like most quips, it doesn't hold up under scrutiny. The article about videogame violence talks about the decline in violent crime (FBI Uniform Crime Reports) that has occured at the same time as increasing realism in video games, including violent games. The article about piracy is actually discussing how businesses have taken a highly nuanced topic (copyright) and are successfully selling their very one-sided interpretation to governments in Europe.

The problem with thieves is that they have learned not to value long-term goals or to put weight on medium to long term consequences. As a result, their moral decision making is skewed towards what they can get away with right now, while simultaneously discounting the effects their actions might have on themselves and the people around them.

As to how and why this happens, some see their parents or others in the community around them growing old and miserable, having worked hard for a long time and getting very little for it. Some are taught that morals are a set of rules without any explanation of the why's behind the rules. When "because I said so" doesn't answer the question any more, but no other answer is given, people will successfully learn to ignore their perfectly functioning conscience in favor of what they've learned (rationalization).

Sadly, I'll now have to explain that understanding why thieves behave the way they do does not excuse or justify their behavior. Oh and I most definitely am asserting that fear-based Christian morals are worse than useless in teaching morality and are part of the problem.

But you may have reached different conclusions on all of my points...

Regards,
Ross

Re:This is unethical

[roseblood]

a: a lot of consumer electronics stores have very limited return policies. compusa in particular charges 15% restocking on non-defective opened items.

I got frelled by this same policy at Circuit City.

Got my brother a scanner for xmas, turns out my mom got him a digital camera, so I went to exchange the scanner for camera go-alongs (bag, batteries, flash-cards, tripod, etc.)

When I went to return the item (unopened mind you) the guy opened the box, removed the scanner, cable, and software, inspected it for missing parts, then THREW THE BOX IN THE TRASH and only returned 85% of the price of the scanner to me on a gift card.

He explained that there is a 15% restocking fee on anything that's been opened. I stated that it had not been opened until he had done so (he had to undo a sticker over the flap of the box and tore off a few layers of the box in the process.)

When continued refusing to give me 100% credit then asked for a manager. He claimed he was "in charge." He didn't say he was a manager. I called his bluff, pulled out my cellphone, dialed 411, called the store, and asked for the manager. The guy promptly discovered a manager was available and summoned her.

She asked the kid of the box had been opened. He said yes. I said the kid opened it. She said he had to open it to make sure everything was being returned. She also refused to credit my sale 100%.

Out comes the cell phone again.

"411, city and state please."

"Sacramento California"

"What listing please."

"Attorney General's office, the department in charge of business practices." (GOD, I LOVE MY CELL PHONE AND ITS *SPEAKER PHONE* MODE.)

Before I got past the first layer of automated push button hell the manager agreed to give me a 100% credit to a gift card.

I folded my phone. I then told her that I no longer wished to do business with Circuit City and would like to have my credit card credited for the full refund and would buy camera-do-dads elsewhere.

When the first words out of her mouth were "Our policy is..." I unfolded the phone and hit redial.

She didn't finish the sentence and instead asked me for the card used to pay for the original transaction so she could credit the full price to me.

I hate to think how many people out there innocently get screwed by these places because they aren't the obnoxious stubborn bitch that I am.

She didn't agree to this until I

Re:This is unethical

[Photon Ghoul]

It's not flamebait if someone simply has a different point of view than you do. You say there is no such thing as fear-based Christianity - then explain the threat of eternal damnation for the unsaved/unbaptized/unholy masses. Sounds like a threat to me! If I don't believe as you do I spend the rest of time 'wailing and gnashing' my teeth.

Maybe you should think about the fact that your worldview is only one of countless others out there and that there's a likely possibility that it's not THE correct one. If a person can't accept that possibility, no matter what religion or philosophy they adhere to, then that person is the one in denial.

Oh - are ideals such as the pursuit of happiness, freedom of speech, freedom of religion, freedom of assembly, right to bear arms, due process and the like Christian ideals? If so, please point out where these are discussed in the Bible and how the scripture lines up with the Bill of Rights and the Constitution. Thanks.

Will affect legitimate consumers

[Sv-Manowar]

These crimes have the potential to seriously affect the service provided to genuine customers through store's return policies. Many people will use retailers who are known to be return friendly when buying goods they are unsure of so as to gain from that store's returns policy and be able to return the product if it does not meet their requirements. If returns policies are widely shaken up, it could be the end for easy customer returns, and the ability to legitimately return goods that do not fit your needs.

Same Ol Same Ol

[ResQuad]

Its intresting to read about technologies involvement in stealing, and a lite overview of how these people do it. Though in the end its the same old story with a slightly new twist. As with everything the criminals and cops(or "good guys") are playing a game of constant evolution

I think the net of this article is that if you are Target Inc and track each recipt in a giant database - you'll be less likely to get ripped off.

Employees are the biggest source of retail theft

[tokengeekgrrl]

According to the Nov 2002 National Retail Security Survey, almost 50% of all theft was committed by employees, not consumers.

http://jrrobertssecurity.com/security-news/securit y-crime-news0024.htm

Re:Challenging Retail Theft Myths

[merreborn]

No one loses inventory when you download music. If you shoplift a CD, then the store loses inventory. And you can't 'return' a downloaded audio file, so there's really no equivalent fraud. Is downloading unlisenced music wrong? Yes. Is it shoplifting? No. Copyright violation is immoral and illegal. It is not theft.

Re:There's one thing I often do

[mumblestheclown]

Some stores shaft me, I shaft them back. It's only fair.

That's some great personal ethics you have there.. basically helping yourself to an extended warranty. You are a common thief, nothing less, and deserve the same punishment as a shoplifer, as that is EXACTLY what you are doing. Your justifications are bullshit. It's time for you to decide whether you are an honest person, or a cockroach. So far, your actions have been that of a cockroach.

refund

[Tomfrh]

A gift card or a store credit is hardly a refund...

All I hear is "waah!"...

[loraksus]

Compared to what some of the poor, victimized by evil customers (thank you best buy) retail stores do, the "rampant rise of fraud" pales.

Let's take a look at what some / virtually all of the stores do.

1. Blatantly and regularly violating in false advertising and bait and switch laws by claiming "oh, it was a price mistake that we don't have to honor that price."
Virtually every online store engages in such practices, although B&M stores are doing this more and more as well.

1a. Not applying sale prices at the cashier or overcharging the customer
2. Using rebate houses that don't honor / lose / just flat out destroy rebates. (CompUSA, TigerDirect, and pretty much everyone else)

3. Using rebate houses that don't pay on time. I've filed over $10,000 in rebates and I can count on one hand the number of rebates that came on time. It should not take 8 weeks for someone to cut you a check. Again, everyone who offers rebates engages in such behavior.

4. Selling extended warranties that are for the most part entirely useless. (My friend's laptop sitting on a kitchen counter started melting - proc overheated, motherboard got scorched and even some of the keys, and the chasis melted, Circuit City refused to honor the extended warranty because they claimed it was "Abuse")

4a. Claiming something is a "warranty", when in fact it is not. Read the fine print on some of these "warranties", have a laugh / cry.

4b. Training their salespeople to lie about the benefits of the "warranty". If some AG wants to file a suit, I know that Staples stores have a couple training CD-Roms lying around that clearly contradict the policies in the extended "warranties"

5. Getting around pricematch policies by ordering slightly different (yet identical in all features) models from the manufacturer. i.e. a HP PSC 950 and HP PSC 950xi. Perhaps not illegal, but a shady, shady practice that lets retail stores ignore their price match policies for many items.

6. (This is really devoted to my favorite, favorite store, Fry'ed Electronics). Labelling missing items as "containing all parts", even though many parts are missing. Then accusing the person trying to return a half empty box of theft.
Or throwing returns back onto the shelf without any indication that the product was returned or is missing parts. I'm sure this violates a whole bunch of laws, but hey...

7. Frys also gets the award for selling accessories that clearly won't work with the product that the customer has. i.e. the sales associates pushing SATA drives onto people who have only IDE controllers, Pentium processors for AMD motherboards, etc, etc.

Of course, every so often, the poor, helpless retail stores get caught and get - at most, a light slap on the wrist.

If you engage in clearly unethical business practices on all levels - from the very top to your store managers and even in the training materials that you give to your associates, you have as much right to complain as someone who paid a drug dealer with fake money and realized that they were sold orageno.

The fraud perpetrated onto the customer by these retail stores far exceeds any losses. Moreover, shady behaviour is encouraged by management and continues, even in the face of the occasional "Martha Stewart" FTC / BBB / "local / regional government agency that handles this sort of stuff" investigation. /I think I hear the theme from "Schindlers List" being played, but it is really, really quiet.

Re:I did it

[timmyf2371]

Then you are a thief, plain and simple. Justify it however you want however it doesn't change the facts.

The correct procedure to have followed in this case would be to either pay for the extended warranty of buy a new Xbox.

Look at it this way: if you justify stealing from Walmart because a product is out of warranty and you didn't bother to buy an extended warranty then the logical continuation of this is that all "customers" would be justified in doing so.

two wrongs don't make a right..

[YesIAmAScript]

Don't like a place's actions? Don't buy there. You don't have the right to commit fraud.

Now, as to your actual points:

1. No reputable B&M store does this. They do make mistakes. They are legitimate mistakes.
2, 3. Rebates are offered by the manufacturer, not the store. Take it up with them.
4. Yeah, I'm sure you're right. I don't buy them.
5. That's part and parcel of pricematch policies. Places want to offer them, but they don't really want to get into price wars. Deal with it. If they didn't have these outs for the pricematch policies, they probably wouldn't offer them, so I don't think you're missing out on something anyway.
6. Fry's no longer puts returned stuff back on the shelf without labelling it as returned. Not because they are angels, but because they got remaed over it in the courts. Best Buy, on the other hand, still seems to do so. I personally don't generally buy these marked boxes, because of the hassles you mention. Now, on the other hand, the one time I did, I bought a $500 video card, when I decided to take it back (defective), the serial number on the card did not match the serial number on the box (not my fault). They had to get a manager, but did they accuse me of stealing? No.
7. That's a gray area, given that you can return anything you buy there, I don't see why this is a huge problem for the customer. And besides, don't buy crap you don't need.

I shop at Fry's a lot, and my experiences have been good in general. Returns are slow there, but partially that's because they allow you to return anything (a good thing in general) and people are there returning BS, like video cards they couldn't overclock enough. Or they are returning something they bought from Fry's just to keep for 3 days while the one they ordered from newegg at a lower price arrives.

In general, I have more problem with the other customers than the store.

But again, in the end, if you don't like the place, don't buy there. You don't get to commit fraud as some kind of vigilantism.