The October 18, 2004 edition of Fortune Magazine points to an increasing practice of retailers demanding ID when customers return products. This has led to a flurry of complaints to the Canadian Privacy Commissioner (see "New Privacy Law Sprouts Forest of Complaints"). But the Fortune article refers to a new service that tracks shopping patters and the returns of individual customers. If you have a pattern of "excessive returns", your return will be declined.

FORTUNE - Magazine - Sorry, Your Return Is No Good Here:

"Walking through the mall a couple of weeks ago, Hayden Cobb, a 32-year-old systems engineer at Lockheed Martin, couldn't resist a few impulse buys. But after realizing that all his crisp new shirts didn't fit right, he headed back to the Express store near Atlanta, receipt in hand. The clerk asked for his driver's license, swiped it, and then handed him a small slip of paper that read 'Return Declined.' 'I was dumbfounded,' he says.

Cobb is just one of the many customers who are finding that returning merchandise isn't as easy as it used to be. Retailers including Express, the Limited, and the Sports Authority have begun tracking consumer return and exchange habits to help curb the $16 billion that stores lose in 'return fraud' each year. All the companies mentioned have enlisted California-based Return Exchange, a five-year-old for-profit company that stores customer ID and payment information and tracks shopping behavior, looking for patterns of fraudulent or excessive returns. The system also aimsto prevent 'wardrobing,' in which people (women in particular) buy clothes, wear them to a party, and return them the next day. 'We're not accusing you of being a thief,' says King Rogers, a consultant who advises Express on security matters. 'We're suggesting that you're not a profitable customer.' While stores have long reserved the right to refuse returns, shopper tracking has privacy watchdogs like Jordana Beebe of the Privacy Rights Clearinghouse alarmed (she's particularly worried that data across stores may eventually be aggregated)... "

Labels: information breaches