Retailers should focus on activity types instead of demographics
Return fraud isn’t limited to one type –
there’s wardrobing, tag switching, auction swapping, receipt fraud, and the list goes on. Likewise, return fraud perpetrators are just as varied. But there are many misconceptions about who’s most likely to commit retail crime. Teenagers, people of certain races or ethnic backgrounds, and people of certain socioeconomic statuses are often pinpointed as possible criminals. But these stereotypes are not only inaccurate – but they’re also dangerous.
f you profile customers based on demographic criteria, you run the risk of offending, or being sued by, customers who have been wrongly targeted. You also waste time and resources targeting one group while several others, who don’t match your criteria, rob you blind.
And, perhaps most importantly, we live in a digital age in which return fraud itself shifts quickly, often more quickly than any business realizes. So, it’s impossible to create a specific profile for potential thieves when everything about retail crime is changing.
To truly tackle return fraud, it pays to recognize the diversity of the thieves you’re dealing with. You’re better served, homing in on fraudulent activity instead of specific people.
1. Retail crime is an equal opportunity activity
For ages, it has been widely believed that teenagers steal more frequently than adults, but a 2004 University of Florida study found that middle-aged adults (ages 35-54) were more likely to shoplift than children.
Another popularly held belief is that women and girls steal more frequently than men, but studies have also debunked this, proving that men commit retail crime just as often. People of all ages, all genders, and all backgrounds can be criminals. The demographic profile of a potential thief is moot.
2. It’s not the neighborhood or location
It’s easy to think that what’s happening in one of your stores is a side effect of the location. For example, if you’re located in or near an underserved community, you might assume that an increase in fraudulent activity is a side effect of the neighborhood. But this isn’t the case. 20% of known retail criminals visit three or more locations of the same chain when committing retail crime3. This means you could get hit in the underserved community, the upscale suburb, and the airport hub. Don’t assume that a place with a higher probability of crime will be your only hot spot.
3. It’s not always the customer
It’s perfectly natural to focus on customers when it comes to retail fraud. With so many internal controls, it can be quite difficult for employees to pull off return fraud schemes. But it happens, and often, the criminals are longtime, hardworking, loyal employees. Rarely is it the newbie – only 7% of new staffers commit a dishonest act during their first year of employment. The person who’s your biggest threat could be behind the counter, not walking through the front door.
A universal return system for every customer type
Return fraud perpetrators have many profiles, many methods, and many motivations. Attempting to create thief profiles is fruitless work. Instead, leave the heavy lifting to re-turns.com.
Re-turns.com is a universal product return system that equalizes every customer by tracking their return activity. Each customer is given a Customer Product Return Score or CPRN. The higher the CPRN, the less likely the customer is to commit return fraud.
Instead of trying to spot a thief, you’ll set a CPRN minimum that you’re willing to accept. If customers fall below that minimum, their returns are rejected. There’s no tracking, no haggling about return policies, and no profile or case building. This is a short, easy, and fair solution for a complex problem.