Are Gift Card Scams Funding ORC?

gift card scams

As professionals in the retail space, it’s our responsibility to keep up with the methods and tactics used by thieves when it comes to organized retail crime (ORC). These days, improving technologies equal potentially increased profits in the eyes of theft groups.

Criminals used to steal merchandise and fraudulently return it without a receipt for cash. But with more and more retailers catching on to elements of return fraud, many have changed their policies and begun issuing gift cards or merchandise credit instead of cash for non-receipted returns. This has solved the problem, right?

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Unfortunately, the answer is no. Gift card scams now seem to be the order of the day. Thieves are now returning stolen merchandise and then reselling the gift cards themselves, according to a feature article in the latest issue of LPM Online. From the article:

As retailers have responded to the evolving needs of the business, most have changed their return policies and typically issue a gift card or store credit when returns are made without a receipt. Unfortunately, this still offers the thief a lucrative opportunity. Rather than fencing the merchandise for 30 percent of its value on the streets or selling the goods on the secondhand market for 60 to 70 percent of its value, they can return the merchandise to the store, receive a gift card, and sell the gift card for up to 80 percent of its market value. Factoring in the sales tax portion of the return, which can bring an additional 5 to 10 percent depending on the state, the thief can be looking at an 85 to 90 percent return on their “investment” for the stolen merchandise.

In “Gift Cards Have Become a Common Currency for ORC,” LPM Editorial Director Jac Brittain, LPC, looks at the market for resale gift cards and its ties to ORC and even the illegal drug market. Check out the full article to learn more.

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