Shoplifters, believe it or not, can be pretty smart. I really hate saying that out loud, but it is true in most cases. Now, I’m not talking about that teenager who comes in and steals something for the first time, or the stay at home mom who is out looking for a little excitement. They’re stupid. Big difference. I’m talking about those people who make a full time career out of shoplifting. Some of these people make double, or even triple what most people make in a year, and it’s tax free. That alone is pretty genius. The more I progress in my loss prevention career, the more I see shoplifters progress. The more they progress, the more anti-shoplifting tactics evolve and it’s an endless cycle. One of the biggest and most damaging new trends I’ve seen develop over the last 4 years is refund fraud.
If you aren’t familiar with this fraud scheme, it goes something like this. Shoplifter steals item from store, brings it back for store credit, then buys what they really want, or sells the credit to someone for cash. Very simple tactic, but very difficult to catch if you are a smaller company. A few months back, I was reviewing some inventory adjustments on fishing line. I noticed that one of my stores had a large decrease in what they should’ve had, while a sister store had an inflated inventory. I thought this had to have been a shipping error from the warehouse. Turns out, I was wrong. The fishing line was a prime target for refunders since they were not protected with an anti-shoplifting device, nor would they set off the Checkpoint system at the exit doors.
After a few days of working the case, I found where the store with the inflated inventory had taken several refunds in the past few weeks of this particular fishing line. Each spool retailed for about $50 and are geared toward your more serious fisherman. After reviewing some sales data, I determined that there were no sales of that sku to support the refunds. That’s as far as I could go with it though. We don’t have a camera on fishing line and it’s not generally thought of as a high theft area, so there isn’t much attention paid to that area of the store. I talked about the probable thefts in the store meetings daily, but unless we caught someone in the act, there wasn’t much I could do at that point, even though I knew full well these people were stealing my fishing line and then going shopping on my dime.
A few weeks went by and we continue to accept the refunds. Our way of thinking was that at the very least, we were recovering our stolen property and building a case. If we denied the refund, we would simply be out of the product and not have any idea on where it was going. I finally had enough and I had the store order some Checkpoint Labels. We generally used these on our higher theft merchandise, but I decided to apply them to the fishing line. About a week went by and I was helping a manager near the entrance when one of the suspects I had seen return the fishing line before attempt to exit the store. This time, the Checkpoint System alarmed and I was able to make a product recovery. Since then, we hadn’t had any additional refunds on that particular item.
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