ST. LOUIS – Heading to the mall to return an unwanted gift? Better hope it came with a receipt.

If you don’t, be prepared for some questions – or even to have your return denied.

More retailers are requiring a drivers license or other government photo ID when you return or exchange merchandise. They feed your name into databases that flag people for repeated or suspicious returns.

If your name is flagged, the store could bar you from making a return.

Private information

Consumer groups see privacy issues. Why should you have to provide documents showing proof of name, address, age and other personal information just to return a present?

More than one in five merchants uses this process, even for customers who produce receipts, an industry survey shows.

Returns without receipts get even more scrutiny: Seven in 10 merchants say they require customers to produce identification.

Paul Stephens of Privacy Rights Clearinghouse says merchants certainly have a right to protect themselves against fraud.

“But why should a consumer have to give up personal information that was not required to make the sale?” he asks.

Return abuse

Merchants blame growing return abuse.

Returns this holiday season are expected to total about $47 billion, an increase of $6.72 billion, says Joe LaRocca, vice president for loss prevention of the National Retail Federation, an industry group.

For the entire year, returns are expected to total $219.1 billion, an increase of $41 billion.

Retailers say about 1 percent of customers abuse returns, with some committing outright fraud.

Fraud includes:

• “Wardrobing” – buying merchandise with intent to return, such as a video camera after using it for a wedding, or a dress after a special occasion;

• Using a stolen credit card to buy merchandise to return for cash.

• Receipt fraud – using falsified, stolen or reused receipts to return merchandise.

LaRocca says merchants who use traditional manual methods to track returns often can’t protect themselves against fraud.

“I’ve seen ladies bring in a sackful of merchandise that stinks, is dirty and torn, and the retailers don’t have a return policy that’s really clear about timeliness or requiring a receipt,” he says.

Many national retailers now outsource the collection of their return and exchange data to The Retail Equation in Irvine, Calif.

TRE says returns are a privilege, not a right, and merchants aren’t required to accept returns.

The company says it uses “statistical modeling and analytics to predict (customer) behavior,” allowing merchants to prevent fraudulent and abusive returns, reduce return rates and save millions of dollars a year.

TRE’s software compares the customer’s return frequency and dollar amounts against the retailer’s return policy. Denials fall into two categories:

• Returns that violate the retailer’s return policy, such as a return without a receipt, after the allowed return period or multiple returns beyond the quantity allowed within a given period.

• Returns that indicate return fraud or abuse.

Some merchants issue warnings to consumers before denying returns.

TRE says denials are based on the frequency of returns, the dollar amounts of the returns and whether there is a receipt.

To reduce the likelihood of a denial, the company says a consumer should reduce the frequency of returns, reduce the dollar amounts of returns, return within the store’s time limits, and keep the original receipt.

TRE says its software doesn’t base denials upon age, gender, race, nationality, physical characteristics or marital status.

The company says it doesn’t share one merchant’s return data with other merchants, sell the data or share it with credit agencies.

Being denied doesn’t imply that the consumer has committed fraud or is habitually abusive, TRE says. It “merely means that the consumer has requested what that specific retailer considers excessive returns.”

A denial doesn’t mean the customer is “blacklisted,” TRE says.

The company won’t disclose the names of clients, but says every mall in the country probably has at least one store using its Verify-1 software.

Many other stores use their own databases to track returns.

Privacy Right’s Stephens says the new returns policy may offend legitimate customers with proof of purchase and merchandise that’s in new condition.

“Why do they need to prove anything further than that?” he asks.

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