Case Study: Organized Refund Fraud

Organized refund fraud has been going on for many years, and it is likely to continue, especially if stores make it easy for thieves to get away with it.


So what’s the answer? First of all, conduct a thorough investigation. Getting law enforcement cooperation is difficult enough; it will be impossible if you don’t hand over an air-tight case.

Secondly, develop a relationship with someone in a position to assist your cause. Ask around among other loss prevention personnel. Who has championed their cases? Once a prosecutor or officer has become familiar with retail crime, he or she is more likely to take on more crimes of a similar nature.

If you can’t find anyone who fits this description, cultivate a relationship with someone from a local law enforcement agency. Invite the agency to give a presentation to your store, mall or association. Then let the presenter know that you’re interested in sending some good cases his or her way. Anyone would be delighted with the opportunity to look good without doing any actual work.

A third option is to educate prosecutors and law enforcement in your area about the consequences to all of us for letting organized retail crime go unpunished. Many people in law enforcement are still unaware that a lot of terrorist organizations utilize retail crime as a money-making scheme that carries a low risk of apprehension or incarceration. If you make law enforcement understand that every dollar ORC gangs steal from you may be sent home to Osama, they may look at your case in a different light.

Finally, if you find it impossible to get off the hamster wheel, work with the media. Reporters love a good story, and once they put the failure of a LE agency to go after ORC into headlines or on the 11 o’clock news, you’ll find police cooperation much easier to come by.

For more information about successful strategies for working with police and prosecutors on retail crime, see the article “Enlisting Police and Prosecutors to Help Fight ORC” from Security Technology & Design Magazine online at http://www.securityinfowatch.com/print/Security-Technology-and-Design/Features/Enlisting-Police-and-Prosecutors-to-Help-Fight-ORC/3840SIW2.

Liz Martinez is a leading security expert and the author of “The Retail Manager’s Guide to Crime and Loss Prevention: Protecting Your Business from Theft, Fraud and Violence” (2004, Looseleaf Law Publications). She is a member of the Retail Loss Prevention Council of ASIS International. Her appearance on “Inside Edition” explaining refund fraud can be viewed on her Web site at www.RetailManagersGuide.com.