Ed went to return a pair of shoes to Finish Line because they were the wrong size. As part of the exchange, the sales associate took Ed’s driver’s license and scanned it, and he wondered why.

I recently visited a local Finish Line store to exchange a pair of shoes. I had purchased the pair online, but when I received them they were a size too small. My issue isn’t with the shoes or for the most part the Finish Line staff. It’s with their return/exchange policy. During the exchange, when the sales associate asked for my driver’s license, I just assumed it was to verify my license against my receipt. Fair enough. A few minutes later, the Sales Associate swipes my license through the card read, then hands it back to me. I ask her what she just did. “I have to swipe it through. It’s store policy.”

I had purchased the shoes online with a credit card and was doing a partial exchange (they didn’t have the exact same shoes in the right size, so I chose a different pair that were twenty dollars more expensive) I paid the difference with my credit card so why would a license swipe be needed? Where does that information go? How long does it go there? Will my information be encrypted? Aside from this, the exchange went well and the staff was helpful enough, but since when did stores start swiping your license information?

A quick Internet search shows that other major retailers do this, including Famous Footwear and Victoria’s Secret. Okay, so it’s common. But why do they do this?

Retailers who scan your license use a service called The Retail Equation, which tracks how often you’ve returned items to stores that use the service, across all stores that use the service. It’s part of stores’ return policies to use this service and guard themselves against fraudulent returns of all sorts.

The Retail Equation keeps a FAQ and its privacy policy on their Web site, but this material can’t exactly printed on your receipt along with the return policy every time you make a purchase. And, as Ed discovered, the real reason why sales associates are scanning your ID isn’t made clear. Maybe because “it’s store policy” sounds a lot less threatening than “we’re checking to make sure you aren’t in our massive database of known scammers.” The latter may true, but it’s not a very polite thing to say.

If you’ve been denied a return or exchange and would like to know why, you can get your personal report by e-mailing the company. If you want to avoid handing over your ID when returning items to a major store…I’m not quite sure what to tell you.

Information for Consumers [The Retail Equation]