Retail return fraud to decline this year

Beware naughty shoppers. Getting away with "wardrobing"- -- buying that special dress for the Christmas party and taking it back to the store after one wear -- could get tougher this year.

A survey released by the National Retail Foundation today says retailers expect such returns to be down 18% in 2009, while fraud involving counterfeit receipts are predicted to decline by from 45.7% to 43.1%. Only 6.4% of holiday returns are expected to be bogus this year, and overall there will be more than a 17% dip in retail fraud in 2009.

Yet, retailers are expected to lose $2.74-billion to fraud this year as compared to $3.32-billion last year. Joe LaRocca, senior asset protection adviser for the NRF, gives a shout-out to honest shoppers for the decline in numbers.


"Retailers are constantly trying to fine-tune return policies to create guidelines that honest customers can live with and dishonest people can't get around," he said in a release . "Many shoppers are doing their part to help stores combat return fraud by being more conscious about saving receipts and attaching gift receipts to presents this holiday season."

The numbers come as a bit of surprise considering the 80.4% of the 134 companies surveyed said they are sticking with the same policy as last year. In addition to that, companies such as Target have quietly introduced a lenient policy this year.

Richard Feinberg, a researcher at the Purdue University Retail Institute, says the numbers probably have to do with the expected dip in retail sales and seasonal hiring. Feinberg predicts seasonal hiring will be down 20 to 25% this year.

"Temporary employees, unlike the loyal ones, are the greatest help in causing fraud by helping their friends return things in a fraudulent manner," Feinberg said in a phone interview. So, the fewer part-time employees, the less fraud.

Whatever the case, C. Britt Beemer, president of America's Research Group, a consumer behavior survey research firm, believes retailers should cut shoppers some slack this year.

"Consumers are struggling to pay their bills," Beemer said in a phone interview. "They can't afford to make a buying mistake."
So, if someone gets stuck with that sweater that didn't fit grandma, she should be able to return it without much grief.

I hope retailers out there are listening.