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Back in Black

November 24, 2006

Driving past the Galleria this morning on the way into work, I could see the thundering herd of traffic weaving in and out of the thoroughfares, its hoods and roofs shimmering in the parking lot lights.

black friday is ON!The big box store’s lots were at capacity, with SUVs slinking through the rows like sharks, trying to get a sniff of the blood an open parking spot.

Yes, as Dane Cook would say … “It is ON!”

It’s Black Friday in America, the biggest shopping day of the year.

Or at least the most hyped.

Statistically, the day after Thanksgiving sees the year’s most retail foot traffic thanks to stores’ “doorbuster” specials and longer operating hours. Don’t think I didn’t consider waking up at 2 a.m. to make a run for the Wal-Mart for one of those $50 portable DVD players. But then my wife questioned my sanity, and I thankfully reconsidered.

But it’s usually the weekend before Christmas that has the highest dollar amount of sales, according to the National Retail Federation (fact courtesy of Snopes).

Why is it called Black Friday? No, not because of the bruises you get jostling people for position in line, though that would be appropriate (advice: wear lots of padding, like heavy coats!).

Though it sounds ominous (if you work retail, it is!), it’s the day most retailers break even for the year, or end up “in the black,” as some businessmen with fancy degrees would say.

If fighting crowds are not your forte, you can always wait three days for the newest shopping “day”, Cyber Monday, which is the first day back to work for most office workers, who quietly scan online for bargains and get shopping done on company time. Though, again, it’s just a myth that this is the biggest online shopping day of the year.

(DISCLAIMER: Corey Clayton has no knowledge of any Internet shopping activity on company time, and that Playstation 3 he’ll buy on eBay Monday morning will be strictly “research” for this blog. Thank you.)

Also hitting the malls in large numbers today are the fans purveyors artists of the five-finger discount. Shoplifting and retail theft is up 20 percent, mostly due to increased leiniency by retailers to please customers and the work of organized criminal gangs of thieves.

From a USAToday article:

Retail theft cost the industry more than $37 billion last year, up from $31 billion in 2003, according to a University of Florida report. It is especially problematic during the holiday season when overcrowded stores make shoplifting more difficult to detect and fraudulent returns easier to conceal. The retail federation said this month that retailers expect to lose $3.5 billion due to just fraudulent returns this holiday season alone.

The article goes on to say how difficult it is for retailers to save their merchandise once it gets outside their doors — legally or otherwise.

Returns are one area where retailers have cracked down. While some will still give cash for a return without a receipt, many major retailers require receipts. And many are using electronic receipts that can track purchases made with a credit card or check. These receipts nearly eliminate the ability to use counterfeit receipts or to return stolen goods. They also use display devices that make it difficult to slide all the items on a hanging rack into a bag, but not too difficult for legitimate customers to use.

“The retail world is so competitive that they are deathly afraid of alienating any customer or raising a ruckus,” says Peter Junger, president and founder of the electronic receipt company SiRAS.com, used by retailers including Wal-Mart.

Prosecuting retail crime is complicated in part because much of the merchandise stolen doesn’t come with serial numbers. That makes it difficult to single it out as stolen.

Unless goods are made under a retailer’s private label and the store has alerted police of a theft, police who stop the driver of a car full of stolen items are “probably not going to arrest them and, most likely, they’re not even going to hold the merchandise,” [Jerry Biggs, Walgreens’ divisional coordinator for organized retail crime] says. “Part of what we do is help police pursue criminal charges.”

USA Today’s Jayne O’Donnell also notes the three other major retail fraud methods that go beyond just swiping the goods from the store:

Bar code fraud
Scammers switch bar codes, which contain the prices for products, from lower-price items onto higher-price ones. Unsuspecting (or complicit) checkout clerks ring the items up for the lower price.

Bar code programs are found on the Internet, and the codes are printed onto adhesive paper. Retailers are encouraging manufacturers to print bar codes onto packages to help prevent bar code fraud.

Gift card fraud
Gift cardStolen credit cards, which need to be used quickly, are often used to buy up large quantities of gift cards — which are much easier to buy in a short period of time than bulky merchandise.
The gift cards are then used to buy merchandise at the store or are sold on Internet auction sites. Thieves also sometimes copy numbers from gift cards in stores and make counterfeit cards, which they use after customers purchase the gift cards, and they are activated. Criminals sometimes check cards’ available balances on retailers’ websites.

When stolen goods are returned, gift cards are often given for store credit and then sold or used.

Return fraud
Sometimes thieves simply return stolen goods and either receive cash from retailers who don’t require receipts or use counterfeit receipts to get cash or credit.

In some cases, thieves will buy one item and steal several other versions of the same item, then use the first item’s receipt to repeatedly make returns to the store for cash or credit.

And return fraud is not just limited to pro thieves. Many stores have trouble with “wardrobing”, or the wear-once-and-return method of getting the latest fashion for your holiday party.

The National Retail Federation has more:

This practice, called “wardrobing,” has affected more than half of companies (56.0%) in the past year and can include returns of everything from special occasion dresses to laptop computers. Retailers often cannot resell this merchandise at face value and are forced to either heavily discount or discard the used merchandise. Also, the unethical practice of wardrobing frequently makes merchandise in the most popular sizes, colors and models unavailable to other customers who would like to purchase the product.

Return fraud has become so rampant in the industry that more than two-thirds of retailers (69.1%) said their companies’ return policies have been changed to specifically address the issue.

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