Holiday Season Retail Fraud: Stores Going Proactive

Return fraud takes many forms, particularly during the holiday season: wardrobing (returning used goods as new or unworn, a trend that we reported on earlier this week), seeking refunds for stolen merchandise with fake receipts, even taking items off the shelf and carrying them up to the cashier to try to get store credit. This is all in addition to the ever-present act of shoplifting that skyrockets in times of desperation, synonymous with the period of lay-offs and recession we are currently experiencing.

An interesting aspect of this trend, however, is that although we've all heard about return fraud in the headlines, and might even know someone who has committed it, stores have been slow to react and only recently seem to be wising up to common retail fraud tactics.

It's about time.

According to the National Retail Federation, return fraud will cost retailers an estimated $11.8 billion in 2008 — $3.54 billion during the holiday season alone. Return fraud is expected to account for 7.5 percent of holiday returns – now that's a big chunk of change being ignored by retail institutions.

Forward-thinking vendors are now deploying both facial recognition technology and other advanced technologies to track and prevent return fraud and outright theft this holiday season. Databases have been developed to store photographs of known criminals and gang members that can be shared across retail institutions and linked directly into participating store camera networks. That means that when someone recognized from the database enters the store, cameras instantly alert security personnel. Furthermore, advanced search engines can be used to instantly sift through surveillance archives for any and all evidence related to a suspect.

During this holiday season, many institutions are taking this all one step further and even tracking and storing images of customers who seem to be taking excessive returns. Just a warning-- don't be unpleasantly surprised with a pair of silver bracelets on your next trip to the local shopping center.