Some companies sell special credit reports containing retail purchase and return histories.

These retail history credit reporting companies collect information related to retail product return and suspected exchange fraud and abuse. Major retailers – such as department stores, home improvement centers, and specialty retailers –use retail history credit reporting companies to monitor customer return habits and reduce losses from return abuse, shoplifting, and fraudulent return schemes (like returning stolen items or “wardrobing”).

When a consumer initiates a return, exchange, or post-sale adjustment – especially returns attempted without a receipt – the retailer often scans the shopper’s driver’s license or government-issued ID, or tracks the payment card used. Retail history credit reporting companies tracks and compiles related information, including the follow data:

·       Return frequency and timing (time between purchase and return).

·       Total monetary value of returned items.

·       Frequency of returns without a receipt.

·       Types of merchandise being returned.

·       Customer name, date of birth, residential address, and ID number.

Some retail history credit reporting companies use predictive algorithms, which analyze the customer’s return history against the store’s risk rules and generates a real-time decision sent back to the register:

·       Approve: The transaction proceeds normally.

·       Warn: The customer is issued a printed warning slip at the register noting that their return behavior is approaching policy limits.

·       Deny: The customer is blocked from completing the return.

While retailers rely on retail history credit reports to curb billions of dollars in yearly retail fraud losses, these special credit reports have faced significant consumer backlash and legal scrutiny:

·       Algorithmic Opacity: Consumers often report surprise and frustration when denied legitimate returns, as the underlying scoring thresholds are proprietary and secret.

·       False Positives: Heavy shoppers, frequent gift returners, or consumers who regularly make legitimate returns without receipts can be inadvertently flagged as fraudulent or “blacklisted” from returning items for a set time period.

View the companies selling special credit reports for retail history.