Preventing Return Fraud During The Holiday Season And Beyond
By Kristin Secreto, InComm Product Control
As a retailer, you know all too well the doubled-edge sword of the holiday season. It’s your most lucrative time of year but it’s also the time of year when return fraud occurs, which cuts into your profits.
This year, you don’t have to feel the same pain. Through a secured shared database that monitors a product’s channel history by unique identifier, such as a serial number, you can track an individual item’s status throughout the sales cycle, whether a transaction was completed in store or online.
Here are just a few examples of how manufacturers and retailers can leverage this technology to protect their businesses from return fraud during the entire lifecycle of the product this holiday shopping season and beyond.
On The Road
Cargo theft is an all too common occurrence that puts inventory at risk before it even arrives at a store. Even if a manufacturer knows the type and quantity of the product that was stolen, it can be difficult to track missing units because of the variety of ways criminals can sell or launder them.
Manufacturers can protect against cargo theft by logging the individual serial numbers of lost units and sharing them with retailers and law enforcement in a shared secure database. Retailer’s can access the same database real-time during an attempted return so stores instantly know when a person is trying to exchange a stolen good. With this information in hand, retailers can decide the best course of action for recovering the lost merchandise.
In The Store
Return fraud can happen at almost any point during a product’s sales lifecycle, even when merchandise is still sitting on a store shelf. As foot traffic spikes around the holidays, there’s ample opportunity for fraudsters to take items off the shelf, march right to the return desk and request an exchange of their “purchased” product.
With a system that tracks unique identifiers of their inventory, retailers can determine when a specific unit arrived from the manufacturer and when it was sold. If the product brought to the return desk isn’t registered as a sold item, then the store can proceed to investigate whether the consumer is attempting a fraudulent exchange.
After The Sale
Protecting against return fraud is further complicated when fraudsters exploit promotions and return policies that differ between retailers. By returning a purchased item at a different store, fraudsters could take advantage of promotions or sales, ultimately allowing them to walk away without a product and with free money or a promotional offer from the retailer.
Retailers can prevent this by informing an automated system of the promotions and transactions which are occurring throughout the year. The database could not only track the unique identifiers of products sold, but also the price or promotion at which they were sold. Providing access to this information allows stores to identify situations when a fraudster may be attempting to secure a refund for more than what they originally paid.
When manufacturers and retailers align their supply chains, inventory management, and point-of-sale (POS) processes with an automated system that tracks unique identifiers, they’ll be empowered with the information they need this holiday season to confidently process legitimate returns while minimizing fraud.
With more than 20 years of experience in account management in software, hardware and Internet technologies, Kristin Secreto is the Vice President, General Manager of InComm Product Control, a product lifecycle tracking solution that enables retailers and manufacturers to make smart and timely decisions about product logistics, sales and returns.Using its OmniTrace™ and ReturnFlex product tracking technology, InComm Product Control reduces shrinkage and deters return fraud. For more information, visit www.incommproductcontrol.com.