Think the stores are jammed now? Get ready to stand in line if you plan on returning any holiday gifts.
Retail experts say ‘tis the season to return merchandise, with a slew of rejected gifts and artful scams targeting shops just before and after Christmas.
The influx has many stores bogged down by refund pleas, and turning to high-tech tools to help ferret out scams and track chronic returners.
More and more retailers are relying on computer databases to track returns so they can know if someone has been hitting a chain repeatedly for questionable refunds at different outlets, says e-commerce expert Tim Richardson.
The crackdown comes as a recent report by Boston Consulting Group found returns — both legit and fraudulent — cost Canadian stores $10 billion a year, bogging down staff with extra paperwork and restocking.
While most stores request a name and phone number with each refund request, Home Depot goes a step further by asking most people for their driver's licence number, says company spokesman Nick Cowling.
He says that tends to be more reliable than asking for proof of a name, address and phone number which could be more easily fabricated.
“You can't change your driver's licence,” Cowling says.
With that information, Home Depot can cross-reference it with data that may have already been obtained at any other outlet in Canada.
“We look for everything from multiple returns to multiple store returns to those sorts of things,” Cowling says. “If they returned the same product to 12 stores, that would come up.”
But even as big box stores increasingly turn Big Brother, determined crooks have thought up new ways to use technology to their advantage, says Derek Nighbor of the Retail Council of Canada.
Nighbor says some retailers complain of being fleeced by fake receipts.
In this scenario, a thief uses a high-quality scanner and printer to dummy up a phoney receipt and then returns stolen goods for a cash refund.
But one of the more enterprising scams recently took place in Alberta when swindlers snuck portable scanners into various stores to copy price labels, says Cowling, noting Home Depot was among the shops hit.
Fake labels were then printed elsewhere, with the prices heavily discounted.
“They'd come in with this label and put it on a product that might be $150. And then we scan it through and it's (scanned as) $35 and they walk out and it's a normal transaction,” says Cowling.
Richardson says new technology known as RFID is helping more stores keep track of their products.
These tiny tags store information the same way a barcode does but can be hidden inside clothing, toys or games, he says. They're most often used for high-end electronics.
A stolen good brought into the store by someone with hopes of getting a “refund” would be readily identified, says Richardson, and the tags make inventory counts a breeze.
“The store has a reader and as the box comes into the store, it's automatically read,” says Richardson, a marketing professor at Seneca College and the University of Toronto.
“It's kind of like X-ray vision.”
All these things make it easier for stores to know when to grill customers seeking a refund and when to give them the benefit of the doubt, says Cowling.
“For the most part we try to keep our returns policy pretty lenient because we don't want to inconvenience our customers,” he says.
“We used to have completely no hassle — you bring something in, we'll take it back — and it made it almost impossible to (catch fraud).”
George Stalk, Boston Consulting Group's senior vice-president who co-wrote the report on retail returns, says it's in companies' best interests to make the returns process as hassle-free as possible because customers reward pleasant service with repeat business.
Richardson notes that this philosophy drove the outdoor gear store Mountain Equipment Co-op to develop a generous returns policy for its online clientele, many of whom often purchase several sizes of one item with the assurance that they can easily return products without hassle.
