Share:
Add to Favorites   |  

Retail Return Databases: Fraud Deterrent Or Privacy Nightmare?

8866 views

No shopper wants higher prices because of excessive return fraud, but many people aren't comfortable having their driver's license scanned when making a return at the store, either. We've covered the reasons for this before, but Retail Customer Experience took a closer look.

Some consumers think that the system used by many popular retailers to track shopper return behavior across chains, Verify-1 by The Retail Equation, is too much. The core of Verify-1 is a massive database of shoppers and their return behavior, and identities are verified against this database by scanning customers' identification.

For retailers, the question becomes whether such a requirement is a good idea, especially in an era of identity theft paranoia.

"I think it is a huge invasion of privacy and I personally get very defensive when asked for photo ID," said Lila Delilah, who runs the popular retail blog Madison Avenue Spy. "After a while, however, it becomes less shocking and you know when to expect it. The downside is that I think twice about shopping at a store like Victoria's Secret because I may not want to go through the ID ordeal if I need to make a return."

Would you avoid a store if you knew before shopping there that they use Verify-1 or a similar program?

Driver's license scanning reduces fraud, but may alienate shoppers [Retail Customer Experience]

PREVIOUSLY: Why Is This Store Scanning My Driver's License?

Post a comment

Comments:

134
user-pic

These systems are actually for collecting your DNA that is present on the plastic coating of your driver's license. The DNA is sent to Area 52.

user-pic

I'm tired about any intrusive actions by stores. It is one thing to prevent fraud, but another thing entirely to blacklist people like Vegas.


And I hate when stores ask me for my email or phone number. I tell them I'm already on the mailing list and they tell me it doesn't matter I have to give it to them. Listen buddy, I don't have to give you anything other than the money for the stuff I'm buying. And they usually ask me this before I even tell them I'm paying with credit, so its obviously not for identity verification.

user-pic

From the article: '"If you want to participate in society, prepare to give up some privacy," he said.'

Wow. While to a certain extent it's true, to me it shows he's just a scummy salesman trying to justify his business.

If I have a receipt and I am required to provide ID, I will not shop at that store again. Without a receipt I was more inclined to yield, but if this is the guy my info is going to, I think I changed my mind.

user-pic

Jesus, two years from now places will want to check your credit report if you want to return something.

user-pic

I believe I would think twice about shopping at a store that is going to collect my information in the event I need to return items. I'm torn on the idea, because I'm aware that people abuse the right to return items or rip stores off; but not being a return repeater it annoys me to have to give out my info.

user-pic

I have my receipt and I have the un-used item with all the packaging etc. You don't need my photo, name, address and birthdate. I need my money back.

I don't like how the owner of Verify-1 says that "you should be expected to give up some privacy" towards the end of the article.

I sound like a conspiracy nut but I have become increasingly aware of how much personal information is just floating around in various corporate databases.

user-pic

I'm sorry, if I actively knew a retailer was using this system when processing return I'd avoid them like the plague.

I'm sure there are far more less intrusive ways of verifying information other than this fraud/identity theft inducing measure.

What happens if on of these two company's databases get hack and all that personal information gets out?

They'll send you a sorry note with a coupon for 10% off your next purchase...

user-pic

I agree with the concept to prevent too much fraud, but as a consumer who returns things, NO, I do not like being asked for my I.D. Unfortunately, people have abused the system and made it more difficult for the honest ones to return things.


I just received a bunch of baby shower presents that A- I wouldn't use or B- didn't fit the baby. I tried returning a package of preemie diapers and size 1's, plus about $20 worth of outfits. Usually, Walmart gives you back a gift card worth the value of your returns. They wouldn't this time, and said I could only exchange things- Get different size diapers and pick out different outfits. I had planned on taking the gift card, probably $35 worth, and buying a CRIB. Instead, Walmart did not make one single extra cent off of my return, yet still had the balls to ask for my ID for EXCHANGES.


God help us on Christmas.

user-pic

I think it's very hard for a company to strike a balance between protecting consumer privacy and protecting themselves from fraud. Although I don't see why something like a national database needs to be kept; can't the company just have their own database for their own returns?

user-pic

@twophrasebark:


[thinks twophrasebank may not understand the problem]

user-pic

If you have a policy that allows returns, you should be prepared to accept RETURNS!If that means someone is "renting" a pair of shoes, than so be it.
Maybe restocking fees would prevent this better (except in the case of exchanges).

user-pic

@RevancheRM: [thinks RevancheRM may not understand jokes]

user-pic

@aswearengen: When it comes to purchasing and they ask for my number I always refuse. When it comes to returning I give them my work address and my cell but always off by one digit.

user-pic

@donnie5: So it's okay for someone to rent a piece of clothing that the next person will buy at full price, not knowing it's been worn before? It's stealing, pure and simple.

user-pic

@squinko: They could and probably do, but there are many people who steal from 1 Walmart and return things to a different walmart. So the national database is made to protect the chain as a whole from fraud. Unfortunately, it makes me nervous as f*ck about my privacy.


I guess, if you don't agree, you just don't patronize the store. I'm guessing a consumer upheaval won't do much to deter the practice.

user-pic

@donnie5: I like the idea of a restocking fee. It will encourage people to think twice before making purchases.

user-pic

What's next..TSA agents at the Walmart? Big box retailers track everything from the factory to the checkout. They already know our buying patterns. Now another database gets a chance to be compromised seeing if we return the lame shirt from Grandma? They have another article on the website: The five myths of customer service: What you don't know is hurting your business [www.retailcustomerexperience.com] One of the myths is (surprise): "Myth 4: Many customers are crooks and you need a rigorous return policy, like getting receipts.
Fact: 98 percent of customers are honest and, by running them through the gauntlet to catch the 2 percent, you are doing serious damage." Maybe they should learn by it.

user-pic

Almost makes having a fake ID worthwhile, and I haven't been under 21 for a while now.

user-pic

@Verucalise(wantsherfigureback): Damn, lemme rephrase my first sentence-


"They could and probably do, but there are many people who get around this by stealing from one Walmart and returning the stolen merchandise to other ones."


Need. More. Coffee.

user-pic

This is, oddly enough (I say that because consumer protection laws are normally very weak here, weaker than the USA), illegal in Canada. A store may collect the information for its own use, and that's about it (and that always requires disclosure, if not release). Anything else requires large, 100% OPTIONAL, release forms.

My wife even had to sign one just so the hospital could release any necessary information to her family doctor (and vice versa) when she has her baby. Because, you know, wouldn't want the family doctor to know how the baby turned out! :^P

user-pic

I don't make many returns, and in my experience, I've only been asked for ID to verify that the name on the receipt is me. And I've only had my license scanned once, and that was when I lost my receipt.


I don't return things enough to quibble over it much because when they need my address and stuff, no one's ever made a fuss when I don't write anything there, or write a line in the blank.


I do know people who don't try things on in a store, though. They think they know their size, so they go in, grab what they want, and head to the register. Then they try it on at home, and whatever doesn't fit, they return. I don't think it actually saves them any time, but I know some people who do it because they hate being in a store.

user-pic

@pecan 3.14159265:

Pedant alert: Fraud, not stealing. ;-)

Only because I'd rather know that calling someone a theif means they're someone I don't want to be around, and someone I'd like to see in prison. You know, rather than a co-worker.

user-pic

@squinko: I was thinking the same way, until I realized with the way most stores computer systems are (TJX leak ect.) I'd rather the information be stored by a company who does that exclusively, and can make things like data security a priority, rather than just another thing to think about in the larger picture of running a retail establishment. Of course this doesn't guarantee that they have better security than the individual companies would, but they are probably aware that they are always 1-2 big leaks from being 100 out of business.

user-pic

Do what I did. It worked for me once, but I've only returned probably two things in the last five years.

I bought a digital camera from Circuit City. It was priced right and had the features I wanted. I tried it on at the store, but after using it for about a week, I noted that there were several defects in the camera software that were problematic for me, so back it went.

Circuit City did NOT ask for the credit card so they could refund the charges, they said it was on file. Ok, this made me very nervous considering it was just after the TJMaxx breach.

The customer service peon asked me for my license, and when I refused, called over her manager who told me they wouldn't process the return without an ID. I explained why, given that they already kept my CC info on file without permission, and then I pointed out to him that there was nowhere on the receipt I was handed at purchase that said anything about needing an ID for a return.

So, after some brief push-and-pull, I left the camera there on the counter and walked out with my receipt.

I then called my CC issuer and explained the situation to them. I told them how I know they covered any losses due to fraudulent use of my CC, but I asked who will cover losses related to theft of my identity because someone breached my license info.

They agreed, and they charged the whole amount of the camera purchase back to Circuit City.

This endeavor may not be for everyone if you can't handle a little heat. Circuit City actually had the balls to contact me (see, they already knew who I was and didn't really need my ID anyway) by mail and demand that I make a payment to them plus the chargeback fee.

I wrote them a nastygram and they backed off, but I have no doubt that my identity information is currently floating around in some hacker's basement, ready to be plucked and consumed like a grape off a tree.

user-pic

I definitely wouldn't shop there. I can understand wanting a deterrent for fraud, but that's why the myriad of other rules and regulations are in place.


What exactly are they planning to do with the information? Ban excessive returners from shopping at their stores? If they have met the conditions for the return they shouldn't be penalized for making a return. If you think it's allowing for too many returns that are somehow limiting your bottom line, make the conditions more strict. The first two examples in the article are bull because most retailers charge a 15% restocking fee. And the dress situation is combatted by the retailers ability to deny returns that look worn.

user-pic

I think that requesting to look at your ID, and putting down your name is one thing, particularly if you are making a return without a receipt.

In contrast, scanning the ID (which contains Date-of-Birth, name, address, etc) allows all your personal identifying information to go into some database. And all I have is the corporate word that it won't be used for marketing, or worse, get stolen (lookin' at you TJX).

This is why I no longer shop at Victoria's Secret for my wife. She loves their perfume and body lotion stuff (and heck, I like their other stuff--on her), but the "Scan your full information for ANY return or exchange--even a like-for-like exchange WITH a receipt" policy is preposterous, and makes every customer out to be a criminal.

I won't shop at a place that doesn't extend the slightest in trust to me as a consumer.

user-pic

Unfortunately, it's a no-win for the stores. If they give up the database service (which I think they should), they're going to have to get tough with their return policies. No more "no questions asked," it's going to have to be defective, or obviously unused.

Then we'll have folks coming here to complain about stores' strict return policies...

user-pic

@arstal: The problem with being so far removed from 21, is I don't know where to go anymore. The folks that were doing it when I was in HS are probably in jail for larger offenses and the new ones probably wouldn't trust me not to be a cop.

user-pic

I used to work for a (now defunct) department store parent company in the credit center. The stores only required ID for returns without a receipt. An associate was concerned and called, we could pull up the ID number and see just how many undocumented returns they had done. If it was excessive (usually had to be several in a short time period), the customer would be told that they weren't allowed to make a return without the receipt. More than a few customers tried to claim that their ID had been stolen and obviously the thief was the one making fraudulent returns.

user-pic

I wouldn't allow my license to be scanned. See my ID? Sure. But just because the strap broke off their cheaply made purse doesn't entitle them to a copy of my personal ID.

I'll be happy to take my business elsewhere.

user-pic

@Verucalise(wantsherfigureback): They could keep a shared database per chain (e.g. Walmart), but a cross-chain national database is what's being questioned.

user-pic

The key is to make these "popular retailers" into unpopular retailers since they want to be intrusive. Plus, how long will it be when there will be the inevitable data breech?

user-pic

Am I the only one that doesn't really think this is a big deal? It isn't like they are stealing my social security number, bank accounts, or blood. It's a simple name and address, and maybe age, database. Face it, everyone is already in hundreds of them at the very least unless you have been living under a rock. Now, it would be unethical if, let's say Walmart was to use the information to mail out spam. Otherwise, I don't think it is a big deal. I understand fully why stores must be careful with returns. If I lost my receipt, I really would not expect a store to take my item back, as they have no idea where it was purchased.

user-pic

@EdnaLegume: I have no problem showing someone my drivers license to verify my identity - all my credit cards actually have "Ask for Liecense" written next to my signature.


However, I would not allow someone to take a photocopy of my license as that is just asking for them to steal your identity. A clerk once tried to do that and I proceeded to take a picture of her with my cell phone telling her that I needed it as evidence in case my identity was stolen. She gave back the license without scanning it and I let her watch as I deleted the photo.

user-pic

@pecan 3.14159265: I do the bottom at JCrew, but only because I have been shopping there for literally over a decade and really am sure of my size. I'm also just one of those people that hate trying things on. At home it's a more natural environment and I can see how it works with the clothes and shoes I already have. Occasionally an item it cut oddly and I need to return it, but I give them more than enough money to make up for the very few items I may keep hostage for a few days preventing its sale.


As far as people doing this across board they must either really hate shopping (enough for multiple return trips) or they know the stores really well. Sizes are so varied between stores and brands you have to be pretty familiar with how they cut. I know I often have to pick up three different sizes to see which one will fit, if any at all. It's always a surprise. It's like the numbers don't mean diddly.

user-pic

@ScarletsWalk: I would question that statement on constitutional and fundamental grounds. For instance, it is clear that the need for a right to privacy is a direct result of participating within a society to begin with.

user-pic

@itiswhatitis: my mom gives them the work number....but all you get is a phone tree when you call that number. they use the number to send you the flyers directly, so i guess there's a stash of michael's, ac moore, and bath and body works coupons being sent to the school she works at

user-pic

I would only use that store if I was DEFINITE I didn't need to return the item. I get defensive when people ask me for more information than I think they need-in this case that's a receipt.

user-pic

What happens when the "database" flags a person? It must get ugly at the counter when a return is denied "because we think you are a crook" or "you've returned too many items". I'd hate to be the clerk when the red flag comes up. Too many false positives and pissed off customers.

user-pic

If you have a receipt for a purchase, there should be no reason to need a driver's license. At Lowe's (where I often run customer service/returns), a driver's license is used only if the customer has no receipt and the transaction cannot be pulled up by searching a phone number, credit/debit card, checking account, or gift card. Hell, if a customer can even tell me the date and approximate time, I can even try to find it in the master journal record. With no proof of anything, there's no obligation by the store to accept ANYTHING as a return. If the store is doing something it's not obligated to by returning something with no proof you even bought it, and you accept this, you should also be accepting that the store needs some way to prevent theft. If you don't want your license entered if you have no receipt or proof, keep the product. It's that simple.

user-pic

@Verucalise(wantsherfigureback): Any return over $10 requires a driver's license, even exchanges.


When I worked there, the return policy was gift certificates on anything less than $50, with some leeway. I would have talked to the higher ups.

user-pic

@RevancheRM: For a person who made a leg joke in the armless guy thread...I'm surprised.

user-pic

@pecan 3.14159265: I have bought things and tried them on at home only because I was usually in an extreme hurry (had to be back home and get ready in less than two hours). If it doesn't fit I keep the tags on and return them when I get a chance.

I have also done this when the lines are way too long to try something on. I have no patience for shopping and even less patience for waiting in line (sorry i'm a NY'r). Now keep in mind I don't make this a habit but there are times when I do do it.

user-pic

I suppose I'm in the minority here, but as long as it's posted on the receipt (as a term of purchase or something) or there is a sign stating all returns require a form of identification, then I don't have a problem with it. Companies have been asking for ID with returns for as long as I can remember, definitely at least a decade.

user-pic

@pecan 3.14159265: I end up returning a lot of clothes that I couldn't try on, because I end up buying them online. Yes, I'll have a sense of what my size range is at a given chain, but if the green one or the size XL or whatever is only available online, then I won't know how it looks until after I've bought it.

That said, the stores I buy online from are mostly pretty cool about taking returns in the store. It's so much easier to do that than to return-ship things. (Exception being Zappos, because they let you use the USPS.)

user-pic

@squinko/TheRedSeven: You two read that as a joke; I read it as tpb thinking concern over handing over licenses as worrying much about nothing.

user-pic

@beckalina: Wal-mart has a 6-month rotating $100 or 5 return limit for non-receipt returns. In my 3 years of working there, I remember about 10 occurences of this, and most of them were notorious for being assholes.


The only person who ever got this policy overturned was a woman who had returned unused item from a church picnic (napkins, silverware, tablecloths, etc.)

user-pic

I have to concur with the majority of posters. The best person at protecting my information from theft or fraudulent use - is me.

user-pic

@aswearengen: Whenever i shop at the source by circuit city here in Cunukistan, the store i'm at has a "generic I.D". So unless you purchase a warranty, a high-end product like a T.V, computer, or multiple items that exceed $200, they just use the generic I.D.


When it comes to warranties, they use your actual information so that if you lose the receipt, they have your warranty information on file (Which i can agree with).


They have my information with hundreds of purchases, many people computer related for my small business, and i have never received any promotional flyers, e-mails, or anything else of the sort that hasent been sent to other homeowners in my area.