Home > Crimes > Preventing Refund FraudRefund FraudOffering refunds is one way to increase customer satisfaction. However, refunds also provide dishonest people with opportunities to take advantage of the retailer by claiming refunds under fraudulent circumstances. One American study reported that 17 retail companies had a combined annual loss of $472 million from refund fraud. |
| What kinds of refund fraud are there?
1. People steal merchandise from the business and then return them for a refund (either to the business from where they took the item, or to any other participating stores). 2. Staff members keep the receipts from previous sales and use them to process refunds later on (usually cash, but sometimes credit card). In some businesses, depending on the procedures followed, staff members may be able to process a fraudulent refund even without a receipt. 3. People buy merchandise at sale prices and then return them for a full-priced refund at a later date. 4. People buy products or merchandise from the business, use them, and then return them for a refund. For example, someone buys an expensive dress, wears it and then returns it as if they hadn't worn it. How can you prevent these types of refund fraud from happening in your business? Click here to find out. |