Rampant return fraud costly for stores, customers after holidays

- Store clerks might scrutinize your holiday gift returns a bit more this year, and for good reason: criminals.

The National Retail Federation said it expects return and exchange fraud to increase by $300 million this year. The deception comes in many forms, ranging from returns of stolen goods to exchanges of used garments -- but the con is universally costly.

Fraud will collectively cost stores $2.2 billion this holiday season, up from $1.9 billion in 2014, the NRF said. Ultimately, consumers pay those costs in the form of higher prices.

“Return fraud remains a critical issue for retailers with the impact spanning far and wide, in-store and online,” said NRF Vice President of Loss Prevention Bob Moraca in a statement. “While technology has played a significant role in deterring many in-person fraudulent transactions that would have otherwise gone unseen, there is little that can be done to prevent a determined criminal who will find a loophole one way or another.

Fickle consumers will return $260 billion worth of merchandise to stores this year, according to the Federation. That quarter-trillion-dollar figure equals eight percent of total sales.

Retailers surveyed by the NRF expect 3.5-percent of holiday returns to be bogus.

With razor-thin profit margins, stores are super sensitive to scams. So, take it easy on the cashier who demands to comb over your receipt. They're not being a Grinch, the boss is demanding that they inspect every transaction.

Top three tips for returns:

1. DO IT NOW

While it’s true that many stores have liberalized their return policies for the holidays, that generosity runs out in January. After that, your dud of a gift likely will have little or no value. So, get to the customer service desk sooner rather than later -- and, of course, bring the receipt if you have one.

2. READ THE POLICY

Read the store's return policy before you go jump in line. Usually, the terms and conditions are posted online or printed on the back of our receipt (or both). Figure out where your gift falls. Print it if you need to. And manage your expectations. This way, there are no surprises when you ask for a refund or exchange. You can also challenge an employee if you think they’re reading the transaction wrong.

3. KEEP YOUR COOL

Causing a scene won't get you anywhere. Remain calm. Be polite. Recognize that the cashier likely won't have the power to fix a tricky transaction. Quietly climb the ladder – from manager to manager -- and document every step with names, dates, titles, and times. Losing your composure and demanding the CEO right out of the gate is probably a waste of your time—and theirs.  

You can also exchange or even sell them through websites like Cardpool or Card Cash.

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