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How to avoid return fraud this season

How to avoid return fraud this season

After the holiday rush has ended, retailers can expect to see a second surge in customers that is less welcome – returners. Not everyone enjoys or needs the gifts they receive for Christmas, so it's not uncommon to see large numbers of shoppers looking for store credit or cash in exchange for their unwanted presents. However, some people who come to your shop may be looking to take advantage of your return policy by giving back something that you didn't sell in the first place.

Knowing the facts
According to the National Retail Federation's annual Return Fraud Survey, this year retailers can expect to see 10.7 percent of holiday sales returned on average. Of that figure, retailers say they expect about 4.6 percent to be returned fraudulently. In the past year, retailers say the return of stolen merchandise has been the most common form of return fraud. They also point to fraudulent receipts and a practice known as "wardrobing" – when customers return used but non-defective items – as often-seen crime.

What you can do
There are many ways to prevent return fraud. First, make sure that all employees understand your policy – they'll need to know whether receipts are necessary for returns and whether items need to be returned in perfect condition. It's also important to make sure customers know exactly what their options will be if they buy a gift for themselves or a loved one, and then decide they don't want it later. If you don't allow cash refunds, make sure shoppers know this at the time of purchase, either by hanging up a store sign or having employees at the register inform them.

Have your employees regularly review the items on your display tables and wall displays to ensure they have a thorough knowledge of the items you sell, so that they'll recognize items that shouldn't have made their way to your return counter. You may also want to require receipts, or even go so far as to ask for identification from customers who are trying to make returns.

If you sell items off of your adult or child mannequins, you and the customer making the purchase should look over the apparel thoroughly to note any faults. It's OK to sell such items at a discounted price, but you'll need to inform customers that they won't be able to return it for any tears or stains you noticed while reviewing it in the store.