Now that the Christmas buying season is over, many people will be returning their not-so-treasured gifts to retailers. If you fall into this category, don’t be alarmed if they cast a suspicious eye on you and your gift receipt. According to the National Retail Federation, there’s $9 billion in return fraud each year. Return fraud involves a person exchanging stolen goods for cash, using counterfeit receipts or “wardrobing”—a scheme that involves purchasing clothing for a special occasion and then returning to the store for a refund.
With its customer-friendly return policy, Nordstrom has been a frequent target of return fraud. In a particularly colorful example of return fraud, a group of six men used counterfeit checks and stolen credit cards to purchase gift cards that were then used to purchase expensive ball gowns from Nordstrom. After wearing the gowns to various gatherings, these men (that’s not a typo) would return the gowns to Nordstrom for a full refund. In total, they stole $150,000 from Nordstrom using this scheme.
The National Retail Federation estimates the retail industry lost $34.5 billion to fraud-related schemes in 2011, including employee theft, shoplifting, supplier fraud and return fraud.