As more retailers implement or consider e-receipts, and holiday shoppers feel good and think "green" by accepting them, there can be serious fraud and loss prevention consequences if significant merchandise return process changes aren't addressed prior to implementation.
Imagine the risks presented by same-day returns for a retailer using e-receipts and polling transactions nightly. A digital receipt can be transmitted instantly to multiple mobile devices across the city (or farther) and re-printed on all means of paper with no control by the retailer. Now, retailers can be hit with rapid and massive return fraud before having time to react. With e-receipts, retailers are more susceptible to organized retail crime.
The benefits that make digital technology so appealing to consumers pose challenges for retailers trying to balance modern customer service with fiduciary responsibility. E-receipts are easy to transmit, easy to alter, susceptible to cloning and forgery, and hard to delete all instances once saved to storage media – making established LP practices focused on physical receipts obsolete.
E-receipts are forcing everyone to think differently. Historically, the receipt was the primary credential that confirmed a return transaction's integrity. For years, paper receipts have been vulnerable to fraud, and with the advent of e-receipts, the problem will be exacerbated. In today's electronic world, the receipt is no longer the only indisputable evidence of a transaction.
There is no question e-receipts are here to stay. But the question remains: How does one combat the threat of fraud in this rapidly changing electronic environment? A couple ways: Retailers can implement more frequent polling, however, even with an increased frequency, it is still possible to fall victim to seemingly "valid" receipts. A second option is to consider a return authorization tool that is consumer-behavior based, so it doesn't just rely on a receipt (in paper or electronic form), but it measures the consumer's entire purchase and return history to ensure they are not perpetrating fraud.
Regardless of whether e-receipts are on the radar this festive season, all retailers should be aware of several DO's and DON'Ts to ensure holiday returns are converted into incremental sales:
• DON'T underestimate the importance of proper staffing
• DO supply return customers with a reason to keep shopping
• DON'T overreact or ignore the impact of return policies on consumers
• DO prevent customer return fraud as it occurs
• DON'T forget to study the latest trends
Tom Rittman is the vice president of Marketing for The Retail Equation. In this role, he is responsible for the organization's branding, demand generation, marketing research and communications, as well as product marketing. Prior to joining The Retail Equation, Rittman served as the vice president of marketing for Datavantage, the retail technology subsidiary of Micros Systems Inc., where he was responsible for the organization's marketing strategy, development and execution. Before joining Datavantage, he held various marketing leadership positions with TMW Systems and Roadway Express. Rittman serves on the National Retail Federation's associate member advisory council, a committee designed to address the needs of the organization's growing associate member base. He holds his bachelor's degree in Marketing from the University of Akron.
