The document summarizes security issues in the retail industry, including wardrobing/renting of merchandise, fraudulent returns and refunds, gift card theft, and employee theft. It notes that wardrobing and fraudulent returns cost the retail industry an estimated $31 billion annually according to a University of Florida study. Common refund scams include using fraudulent receipts, returning items without receipts, and returning damaged goods sold cheaply to outlets. The document recommends steps for retailers to reduce theft, such as monitoring employee refunds and customer return histories.

1. Curtis Baillie, CSC
Security Consulting Strategies, LLC
www.securityconsultingstrategies.com
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2. University of Florida 2010 NRSS study –
• 140 Retail Respondents - $41 M – 0.09%
• Nationwide - $31 B
Courtesy University of Florida,
National Retail Security Survey, Dr. Richard Hollinger
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3. • “Wardrobing” or “renting” clothing & tools – on
the rise.
• According to a recent NRF survey 61.4 percent
of retailers surveyed reported that they had
experienced some form of wardrobing in 2011.
• Printing barcodes and purchasing at a lower
price/return at higher price.
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4.  Purchasing an item in order to receive a receipt.
Refunder then selects an identical item to
return, using the receipt as proof of purchase.
 Picking receipts from a trash receptacle outside
the store and then selecting the merchandise
inside the store and obtaining a refund.
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5. • Picking up the merchandise from the display
and directly returning it for cash or gift card.
“I received it as a gift and I don’t have the
receipt.”
• Returning boxed/sealed merchandise for a
refund without the original merchandise in
the box.
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6.  Receipt refunders who print their own
fraudulent receipts using authentic rolls of
the retailer’s receipt paper.
 There are over 20 fake receipt making
websites and devices on the internet.
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7. • Returning damaged or salvaged
merchandise sold by retailers and wholesale
merchants to outlet stores.
• The retailer’s identifying marks are supposed
to be removed, but often are not, thus
allowing a refunder to return merchandise to
the retailer.
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8. The best deterrent is…
Customer Service
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9. • If the customer doesn’t want a receipt –
destroy it.
• Empty trash containers frequently.
• Customer’s history of refunds.
• Check refunds against employee database.
 Customer Service
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10. • Ringing employee was not working at the
time of the sale.
• Unsubstantiated refunds.
• Multiple management overrides.
• Customers with multiple refunds with
different addresses.
• Sending customer refund “courtesy surveys.”
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11. • Employees performing fraudulent refunds
and placing them on gift cards for friends or
family members
• “It’s easier than taking cash out of the
register.”
• Most retailers sell gift cards.
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12. • Thief will swipe cards, record the numbers
and place them back on the display.
• Calls 800 numbers to determine the balance
on the cards and quickly redeems and
balance.
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13. Employee instances have increased in the retail Industry.
Here’s an example of how it’s done:
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14. Source: Alberta Community Crime Prevention Association
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21. How small?
$1800. US Dollars
Holds up to 32,000 cards
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23.  Save Mart
Supermarkets issues
identity theft warning
– 20 stores affected
throughout California.
 “Occurred at self-
checkout lanes.”
 Courtesy - SecurityInfoWatch.com
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24.  Olympia McDonald's 17 year old
employee accused of skimming
customers' cards.
 “the boy obtained credit card
information and PIN numbers
from customers with a skimming
device on a card swiping machine
at an Olympia restaurant.”
 “bought electronics and toys
with the stolen information. He
told them he resold the items
on Craigslist.”
 Courtesy – King5.com
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