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Retailers keeping tabs on consumers’ return habits
Shopping » Companies cite security and fraud issues; consumer advocates raise concerns over transparency and profiling.


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At Victoria’s Secret and Bath and Body Works, disclosures at the cash register said nothing about The Retail Equation’s tracking returns.

Home Depot spokesman Stephen Holmes says the return tracking isn’t just about money.

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"This isn’t only about protecting our bottom line," Holmes said in an interview. "It’s about protecting our communities, too. We know from working with law enforcement at the state and federal levels that organized retail crime is feeding other crimes, such as drug trafficking and even terrorism, in some cases."

The Retail Equation says more than 27,000 stores use its services. Best Buy, Home Depot, J.C. Penney, Victoria’s Secret, Bath and Body Works, and Nike are among its clients. TRE would not say how long the profiles on consumers are kept in its database; it varies from retailer to retailer. But a recent "return activity report" obtained by one consumer turned up returns to The Sports Authority dating to 2004.

Here’s how the tracking works.

—A consumer buys an item at Best Buy and later returns it. Even if the shopper has the original receipt and is within the time frame when returns are permitted, store policy requires that the shopper provide a photo ID, such as a driver’s license. Other stores, such as Home Depot, only require the ID if there’s no receipt or if the item was purchased with a store credit.

—The ID is swiped and then some information from the transaction is sent by the store to The Retail Equation. The company says the information captured from the ID typically includes the identification number, name, address, date of birth and expiration date.

—The Retail Equation catalogues return activity by the shopper and creates a "return activity report" on him with his returns at the store. If TRE determines that there’s a pattern of questionable returns that suggests potential fraud, it would notify Best Buy, which could then deny returns by that shopper at the store for a period of time.

The threshold for too many returns is determined by each retailer. TRE says the vast majority of returns — about 99 percent — are accepted.

In a 2011 lawsuit in Florida against Best Buy, Steven Siegler complained after the magnetic strip on his driver’s license was swiped for a return. He wanted the manager to delete the information. His suit said Best Buy refused. He alleged that Best Buy violated privacy law when it swiped the license. But a federal appeals court agreed with a lower court ruling that the Driver’s Privacy Protection Act didn’t apply in the case.


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