To catch a Walmart return thief
A 23-old-year Walmart shopper has been arrested and accused of making $1.3 million worth of fraudulent returns at 1,000 of the chain’s stores nationwide over an 18-month period.
The alleged fraudster, Thomas Frudaker, was arrested last week after employees at a Walmart store in Yuma, AZ discovered that a computer he returned was missing internal parts. Authorities have charged Mr. Frudaker with two counts of fraud, two counts of criminal damage and two counts of theft.
Walmart, according to reports, has been working with law enforcement authorities to apprehend the person or persons engaged in this wide-ranging fraud.
“We have strengthened internal processes to identify and help prevent this type of criminal conduct,” according to a statement issued by Walmart to Business Insider. “We appreciate the quick actions of our associate and swift response from the Yuma Police Department, which provided the break to make an arrest.”
Return fraud and abuse has been estimated to be somewhere between a $10.8 billion and $17.6 billion problem for retailers in the U.S. by the National Retail Federation.
The perceived bottom line impact of this activity has led numerous retailers, both physical stores and e-tail, to step up efforts to catch people engaged in fraudulent returns while even retailers known for liberal return policies have banned individuals suspected of such activity.
Last month, The Wall Street Journal reported on Amazon.com banning some customers expected of engaging in return fraud.
“We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time,” a spokesperson for Amazon told the Journal. “We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers.”
Even L.L.Bean, which was famous for its lifetime guarantee, rolled the policy back to a year after finding that some individuals were abusing the policy.
“Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years’” wrote Shawn Gorman, L.L.Bean’s executive chairman, on the company’s Facebook page. “Others seek refunds for products that have been purchased through third parties, such as at yard sales.”
- Consumer Returns in the Retail Industry – National Retail Federation
- A 23-year-old has been arrested after being accused of making $1.3 million in fake returns at more than 1,000 Walmart locations, and it reveals a dangerous trend sweeping the industry – Business Insider
- Amazon bans chronic returners – RetailWire
DISCUSSION QUESTIONS: Is the 23-year-old accused of cheating Walmart out of millions of dollars in return frauds a symbol of widespread problem in retail or an anomaly? Where are the best opportunities for retailers to cut into return fraud?