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It's an attempt to stop organized retail crime

Retail stores are collecting customer information and creating profiles for those who make returns in an attempt to combat theft, but privacy groups aren't happy about it. 

Large retail stores have had issues with organized crime and chronic returners over the years. Individuals have come up with some pretty elaborate schemes, such as switching UPC codes and purchasing an expensive item for much cheaper. Then, they switch the UPC codes back again and return the item without a receipt, receiving the original price in store credit and selling that credit online. 

Retailers have been looking for ways to deter such thievery, and their answer has been to store personal information on each customer that makes a return. With this information, they create a "return profile," which allows odd shopping/return patterns to be detected. 

Retailers -- such as Best Buy, J.C. Penney, Victoria's Secret, Home Depot and Nike -- use a company called The Retail Equation in order to create these profiles. It works like this: when a customer makes a return, the retailer scans a form of ID (such as a driver's license) and the customer's personal information -- along with the details of the return -- are sent to The Retail Equation.

The Retail Equation then uses this information to create a profile for that shopper, and holds on to this profile for an undetermined amount of time. If a customer has odd return patterns that suggest theft, the store is alerted and they typically don't accept returns from that customer for a period of time. 

While this seems to help the retailers' cause, consumer advocates (like the U.S. Public Interest Research Group) believe this is a breach of privacy to shoppers. They've demanded answers, such as where the information is sent, how long it's kept and who the information is shared with.

The amount of time information is kept varies from retailer to retailer, and according to The Retail Equation, shopper information is only shared with the retailer in which it's collected from. For instance, if The Retail Equation receives information on a return from Best Buy, only Best Buy will receive access to that return profile; not third parties or other retailers like Victoria's Secret. 

Retailers like Best Buy have already started printing warnings on the back of their receipts regarding the fact that returns will be tracked so that shoppers are aware. 

The retail stores added that protecting their financial standings isn't the only reason for the tracking -- but that organized retail crime leads to other local crimes, such as drug trafficking, and preventing one also stops the other. 

Source: Today Money





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