STORES Magazine - February 2009 - (Page 51)

LPINFORMATION / RETURNS MANAGEMENT Identifying Fraud Tying returns to IDs helps Finish Line reduce shrink BY LIZ PARKS O ver a 90-day period, a single individual returned products 40 times to a large retail chain. The dollar amount of products returned was more than the dollar amount this individual had purchased, analysis later determined. In a similar scenario at another chain, veys conducted last year among retail a fraudster purchased 262 items and reloss prevention executives. One study turned 183 items within a 12-month pewas done in the spring by the riod. Again, the returns ($10,485) toGainesville, Fla.-based Loss Prevention taled more than the purchases ($8,643). Research Council (LPRC), the other Analysis later showed that the items was conducted in the fall by NRF. were kept an average of 12 days and What often makes it difficult to detect that, while the average purchase was returns fraud is the lack of a uniform $32.99, the average return totaled process for authorizing a return. All three $58.90. of the incidents cited above were flagged In a third incident at yet another chain, after the retailers began implementing an two individuals returned merchandise automated return authorization program worth $1,851 to three that uses statistical moddifferent stores within a eling to detect the abnorReturns fraud and three-hour period. malities that point to posabuse cost retailers Returns fraud and sible fraud. abuse cost retailers an “Large chains have in 2007 estimated $15.5 billion many stores and many Source: Loss Prevention Research in 2007, according to cashiers individually Council, NRF the findings of two surmaking returns deci- $15.5 billion sions,” says Tom Rittman, vice president of marketing for Irvine, Calif.based The Retail Equation, which sponsored the LPRC study. “But retailers using a return authorization program can automatically and very quickly examine all return transactions and identify people who fall outside the norm on a returns score. “As soon as someone falls [outside the retailer-defined definition] of normalcy, whether it’s measured in dollars or numbers of returns, we can identify it and electronically send the cashier a message to decline the return,” Rittman says. Because a return transaction can be one of the most sensitive interactions between store employees and customers, a return authorization program can make the process easier for those “good” cusSTORES / FEBRUARY 2009 51 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - February 2009

STORES Magazine - February 2009
Executive Editor's Page
President's Page
Are You a Pusher or a Puller?
What Shoppers Think
Online Retail Satisfaction
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Cover Story - Something’s Got to Give
First Look
Online Partners
Inventory Systems
Drug Store Systems
Business Intelligence
Inventory Managment
Online Marketing
Supply Chain - Better Data, Better Decisions
Returns Management - Identifying Fraud
Data Security - Securing Intimate Data
Anti-Shoplifting - Mall of Shame?
Risk Management - Securing Consumer Confidence
Loeb Retail letter
ARTS Update
Point of View
NRF News
Retail Crossword
Retail Industry Calendar
End Cap

STORES Magazine - February 2009