A large part of businesses losing money is because of return fraud. Many actions fall under this umbrella. Return fraud can result from dishonest employees using their position to help family or friends complete fraudulent returns. They can force bad returns through or give out cash without a valid return. Some customers use stores as their own wardrobe or library. This is called “wardrobing” when a customer buys an item of clothing, wears it for an event and returns it the next day. It isn’t limited to clothes, however. Some people will buy a flatscreen TV for the big game and return it afterwards, or even purchase a book, read it and return it for cash. Often this loses money for the store if the item cannot be resold. Customers can also do fraudulent returns under the guise of “gifts”. They purchase items with gift cards and return the item for cash. Also, if an item cannot be returned, they can ask for a gift receipt and later return it for store credit. These are a bit more innocent than the ones that outright commit theft. Some people change details on receipts in order to get more money or exchange something that wasn’t purchased. Another common tactic is to steal an item they have a receipt for, that they often find in the trash, and attempt to return it for money. How do you keep these dishonest returns from happening in your store? 1. One way to deter bad returns is to charge a restocking fee for items. This is especially useful for returns of electronics or other expensive items. 2. Some thieves will replace the item with either a similar item or one of similar weight and repackage it in order to get money back and also keep the item. You can thwart these by encouraging in-person returns when possible, and always checking the item before issuing a return. 3. Keeping careful records can also lower return fraud. Use digital receipts if possible, so cashiers can cross-reference purchases and receipts to check for changes. You can also keep track of all returns to watch for patterns. You can either look for recurring item returns, the same customer returning more than once, or which cashier takes the most returns. These are all ways to notice when you are getting fraudulent returns. Knowing when you are being scammed is half the problem, and halfway to the solution of preventing them, even though it is impossible to prevent all bad returns.