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ID required with returns or exchanges becoming the norm

Retailers embattled with processing returns and exchanges have recently become more aggressive towards customers it believes are habitual returners, some are even building internal databases or, contracting the services of outside companies to manage their returns and exchanges activity.

Retail has become more and more competitive and the Walmart business model of ‘deep and cheap’ is forcing retailers to find solutions to the growing problems related to returns but is it at the expense of consumer safety or simply profits first.

Theft of items and their return costs retailers billions each year in losses. According to TRE (The Retail Equation) retailers are losing more than $13.9 billion to 17.7 billion per year due to return fraud and abuse.

Balancing the privacy of customers is no longer a concern as most privacy policies are written to benefit the merchant and virtually ignore the consumers’ wishes unless the consumer takes the time to opt-out. There doesn’t however seem to be a way to opt out of the returns an exchanges tracking unless you simply refuse to shop at retailers that have such a policy.

Why is this even an issue? The tracking policies vary from retailer to retailer but there is little disclosure and as far as I can determine no codified law on how the information may be used. What happens if the data becomes compromised or, as is the case with the companies’ that are banding together to share the information where is the line drawn on what will be done with the data. Privacy Policies can adapt as technology changes leaving consumers with little choice but to go along.

Without clear disclosure to the consumer how can a consumer dispute or correct erroneous information. Who’s to say that the data can’t be merged at some point with an individuals credit file since being in-debt often results in some consumers frantic return activity.

When asked, Kelly Groehler / Media Relations for Best Buy said of its policy: “Product return fraud and abuse harms not only retailers, but consumers and workers as well. At Best Buy, we strive to deliver great experiences for our customers - and to keep our prices low. One way we can continue to do this is to deter abuse of the product return policy, a practice that incurs millions in expense each year and affects the prices of the products we sell. So we're implementing a system that is designed to ensure the best possible experience for our customers while we work to reduce returns abuse in an informed, reasonable manner.”

That system is called the Verify-2 system provided by The Retail Equation which according to a description on the TRE website enables retailers to rely on objective, verifiable data to determine whether a return is valid. It goes on to say that customers are required to present a valid photo ID card at the time of the return, which is scanned only to check for return history and authorize that day's return; the data will never be sold or used for marketing purposes... If a consumer identifies any inaccuracy in his or her information, wishes to dispute recorded return activity, or if a consumer needs to change information in TRE’s files, the consumer should notify TRE in writing.

The problem with databases is that they can be misused, are misunderstood and often can and do put the consumer at risk without their being a safety net. Plus, its an additional burden being placed on the consumer for more information they need to manage like they have to do with the credit reporting agencies.


+Nick J. West

by Staff Writer / Nick J. West (September 15th, 2011)
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