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RAPAPORT... The National Retail Federation (NRF) estimated that fraudulent merchandise returns at the nation's retailers in 2013 will decline slightly, by just 0.6 percent year on year, to $8.76 billion. However, fraudulent returns for the Christmas season were expected to surge 17.7 percent to $3.39 billion, according to the group's annual return fraud survey. The amount of merchandise that was returned in 2012 totaled $263.1 billion and the figure was expected to decline to $258.5 billion in 2013. Of that amount, retailers counted $8.81 billion worth of fraudulent returns in 2012 and they anticipated the total this year would reach $8.76 billion. The NRF defines fraudulent returns as a serious and ''most misunderstood'' issue in loss prevention for retailers. “While coverage of this issue paints return fraud as one of the ‘less severe’ retail crimes, the fact of the matter is that returning used or stolen items, or even using false tender to purchase items is fraud, period,” said NRF's vice president of loss prevention, Rich Mellor. “Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem.” In NRF's survey found that 94.8 percent of retailers have experienced the return of stolen merchandise in the past year and 69 percent report that they have experienced the return of merchandise purchased on fraudulent or stolen tender, but that figure is down from 84.2 percent in 2012. However, employee return fraud or collusion with external sources is a much bigger problem this year, according to the NRF, with 93.1 percent of retailers having dealt with this problem in 2013 compared with 80.7 percent in 2012. Forty-nine percent have experienced an increase in gift cards/store merchandise credit fraud in the past year, 29.1 percent cited a rise in credit card fraud, 26.8 percent experienced an increase in cash fraud and 18.2 percent stated debit card fraud was higher this year. Additionally, 29.3 percent have found criminals using counterfeit receipts to return merchandise and that percentage is way down from 45.6 percent in 2012. Retailers cite wardrobing, or the return of used, non-defective merchandise such as special occasion apparel and certain electronics, as a major issue; however, 62.1 percent were affected by this practice in 2013, down from 64.9 percent in 2012. The survey found 15.5 percent of retailers dealt with electronic receipt return fraud this year, down from 19.3 percent one year ago. The NRF observed, too, that return fraud has forced many retailers to adopt policies which require customers returning merchandise to show identification.
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