Shop Talk

You’ve been there before. The sales lady in the store skeptically fingers your return item, then gives you a withering look.

“Was there anything wrong with this item????” she asks dubiously, as you flounder to prove your innocence.

Return fraud is expected to cost retailers a whopping $3.68 billion this holiday season, according to the National Retail Federation. That’s a 34 percent jump over last year, spurring 11 percent of retailers to tighten their policies.

Bringing stolen merchandise to stores to demand a credit is the most common form of return fraud, according to the survey. Also high on the list is “wardrobing” — wearing a special occasion item, for example, and then returning it the day after the party.

Some 89 percent of retailers say they’ve experienced return fraud committed by employees, no less.

To protect themselves, more than two-thirds of retailers are now requiring that people who return items without a receipt show identification, as nearly 13 percent of such returns are fraudulent.

Overall, return fraud is expected to add up to $13.95 billion in 2010, up from $9.59 billion in 2009.

The holidays present a special challenge to retailers, given the high volume of purchases and items bought as gifts that may need to be returned. About one-third of retailers surveyed said they make their return policies more flexible over the holidays to accomodate gift returns.