Returning merchandise for a refund has become a common practice many customers take for granted. However, retailers that allow this practice may face increased costs due to abuse of return policies and fraudulent activities, with costs in 2007 amounting to an estimated $10 billion in the U.S. alone.
The Retail Perspective: Loss Prevention, Fraud Control and Privacy, a new report by Sagi Leizerov, Ph.D, and Brian Tretick, two senior security experts in Ernst & Young LLP's Information Technology Enablement Center, focuses on the collection of a customer's personal information in the retail environment upon merchandise return, and how the retailer uses such information.
According to the report, the collection of personal information to account for merchandise returns can be done in ways that meet both the need to confront fraud and also the customer's privacy expectations. Moreover, the record of returned merchandise is only one data element that helps identify and categorize customers according to profitability. The collected information about returns adds to customer profiles and helps determine customer value.
Leizerov and Tretick are available to discuss the following:
- Privacy considerations when recording merchandise returns
- Is merchandise return a customer right that retailers must offer
- How to prevent "wardrobing" and spot return fraud.
- Developing effective data collection measures and return policies
- Identifying profitable and unprofitable customers
- Resources currently devoted to privacy regulations and retail fraud
Dr. Sagi Leizerov is a senior manager in Ernst & Young LLP's Technology and Security Risk Advisory Services practice. He is a member of the Education Advisory Board of the International Association of Privacy Officers, a member of the Privacy Task Force of the American Institute of Certified Public Accountants Privacy, and a representative of the U.S. delegation for the International Standard Organization (ISO).
Brian Tretick is executive director of Ernst & Young LLP's Technology and Security Risk Advisory Services practice. He is a member of the board of directors of the International Association of Privacy Professionals and a founding member of the American Institute of Certified Public Accountants Privacy Task Force.
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To find out about getting a copy of the report, contact Wendy Hirschhorn; 212/826-8790; wendyhi@nyc.rr.com