It’s finally over! Black Friday is all but a distant memory and the crazy rush of holiday shoppers has subsided. You can finally take a break, right? Think again. This time of year is full of thieves who make a hefty living conducting refund fraud. And what better time of year to do than now? Below are some of the most common forms of this type of fraud, and ways that you can prevent it.

Off the Floor Refunds

In this scenario, the thief is simply taking advantage of a heavy return time. They will enter the store without product and grab an expensive item off the shelf. The thief then returns to the service desks and states it was a gift and they would like store credit. This same story is repeated 100 more times throughout the day so the cashier doesn’t bat an eye.

 Added Items

This type of refund fraud is a play on the scenario above. Here, the customer enters the store with a bag containing an item that was legitimately purchased. While walking to the service desk, they take a quick detour and throw a high priced item into the bag. Once at the service desk, both items are returned to the unsuspecting cashier.

Theft and Return

In this scenario, a team of thieves arrives at your store. While one waits in the vehicle, the other enters the store and steals a few high dollar items. Your store team is distracted by the volume of returns and customers in the store, so the theft is easy to carry out. The stolen goods are then brought to thief #2, whom is waiting in the vehicle. Thief #2 then enters the store with the stolen goods and presents it for a return. The thieves make a few hundred bucks and your teams are none the wiser.

 Theft and Return – Part 2

This type of refund fraud is a bit harder to detect. The act is conducted just as it is in the scenario above, however the theft occurs at one store location and the thieves drive across town to a second store location to conduct the refund. It helps them to cover their tracks a little better and makes it more difficult for the retailer to catch on to the scheme.

 The Dishonest Cashier

Why give all the credit to the shoplifters, when dishonest cashiers always seem to gravitate towards refund fraud. With the copious amounts of refunds taking place the week after the holidays, it’s very easy for a cashier to slip in a few fraudulent transactions. It is very difficult to discern the legitimate refund transactions from the fraudulent ones. In this scenario, the cashier conducts a refund transaction, only there is no customer present. The cashier selects store credit, cash or even their own credit card as the form of tender, pocketing the amount.


Is there any way to prevent refund fraud? Yes! Taking a few extra steps can save your store thousands in fraudulent transactions. 1st, establish a return policy that states without an original purchase receipt, only store credit can be given to the customer. Next, establish a procedure for customers coming into the store to conduct a return. For example, an associate at the entrance can stamp each item that a customer wants to return. When the item gets to the service desk, the cashier looks for the stamp before proceeding. A manager would be called for any discrepancies. Lastly, audit returns on a daily basis. Look for frequently stolen items, in addition to cashiers who are giving refunds that are against policy. With a few simple controls in place, you can be certain that you won’t be giving the store away after the holidays!

For more information about Refund Fraud contact us or call 1.770.426.0547.