Proof of Purchase: Some Stores Require Scanning ID for Returns or Exchanges

21 Nov

Be careful this coming Black Friday and holiday shopping season, if returning something retailers are asking to scan ID’s such as drivers licenses.

According to a report by the CBS San Francisco affiliate, certain retailers are requiring customers to hand over their ID’s to be scanned for returns or exchanges. The ID scanning is required no matter if the customer has a receipt proving they legitimately purchased an item.

One shopper, Leslie, was required to give her ID when making a return at The Children’s Place, even though she expressed her discomfort and concern to the sales associate. The response given by the associate? It was corporate policy.

The Children’s Place is not alone. In fact they are part of a growing trend in the retail industry. With margins shrinking due to retailers trying to keep the lowest possible price on products and services, the battle to keep profits up is intensifying. One way to combat profit loss is to reduce returns or exchanges of purchased items.

This is where The Retail Equation (TRE) enters the picture. They have software called Verify which, “uses statistical modeling and analytics to detect fraudulent and abusive behavior when returns are processed at retailers’ return counter.” In other words, when a customer hands over their ID to be scanned, the information is recorded by The Retail Equation and stored in their supposedly secure database. This database is then referenced each time a customers ID is scanned and a new return recorded.

How does this affect customers? According to The Retail Equation they are “contracted by retailers to gather their transaction information, store it securely, and analyze the data to develop and follow return policies for those retailers.” Essentially TRE becomes big brother tracking everyone’s return habits and patterns. On the surface the idea might be a good one. But their FAQ page leaves many questions too vague to be fully trusted.

For example, when asked how a consumer would be denied a return or exchange, the warm, fuzzy and vague answer from TRE is:

“The 1 percent of consumers who get denied exhibit return behaviors that mimic fraud or abuse or exhibit habits that are inconsistent with the retailer’s return policy.

Refused returns generally fall into two categories. First, returns that break the retailer’s basic return policy, such as a return without a receipt, a return after the allowed return period, or multiple returns beyond the quantity of returns allowed by the retailer within a given period. Second, returns that make your overall return behavior indicate return fraud or abuse.

The refusal of a return does not mean a consumer’s return is fraudulent or abusive, only that the return history is often associated with such behavior.”

The first category is understandable but should be easily handled by a sales associate and not need a third-party. Point out the return policy to the customer and how their return violates it. If the customer persists, get management involved. I’ve worked retail before when I was younger for quite a few years as and this was standard operating procedure. It still is for many retailers today.

The second category is the one which gives pause for concern. What constitutes behavior indicating fraud or abuse? Is it someone who returns items frequently? What amount and time frame defines frequent? Too many questions and not enough answers are given to the public without additional questioning and no guarantee of adequate answers even then.

And the last line is glaring with ambiguity. So someone could be denied a return even though their unapproved “account” with TRE is not fraudulent nor their return patterns abusive? That would seem to go against the whole point of the system.

More information is given by TRE on what factors cause a retailer to refuse or accept a customer’s return (proof of purchase or not):

“This varies from retailer to retailer. The factors that Verify-2 may use for a given retailer include:

  • The frequency of returns
  • Return dollar amounts
  • Whether the return is receipted or non-receipted
  • Purchase history”

While some answers seem straight forward, they are really still very vague. The same questions regarding frequency are there. Now there are questions regarding the specifics on dollar amounts, receipts and purchase history. At this point on the non-userfriendly FAQ page, nothing at all tells consumers just what exactly the conditions will cause their return or exchange to be rejected. One has to scroll much further down to find more details of this information.

At this point consumers should be asking themselves just what information The Retail Equation is collecting from a their ID. Again, the answer is vague and open-ended. From their FAQ page TRE states:

“Verify-2 captures several pieces of information from IDs to ensure accurate consumer identification, and the information captured varies from state to state. Typically, this includes identification number, name, address, date of birth and expiration date.”

Returning something in Virginia? You could get more or less information collected than customers doing returns in California. Since each state has specific laws and regulations regarding what information can be collected. But who’s to say that information is not collected anyway? TRE can say they do not collect it but customers have no guaranteed their personal, identifiable information is not collected no matter what state laws are in place.

Where exactly is this database of consumer buying habits stored? The Retail Equation confidently states:

“Data collected by Verify-2 is stored within a state-of-the art, secure data center located within the continental USA. To safeguard consumers’ personal information, TRE takes security measures including maintaining physical, electronic and procedural safeguards. Verify-2 provides far greater security than practices that are common in some retail stores, such as collecting consumer information on hardcopy return slips or saving consumer information on paper logs. Verify-2 complies with all local, state and federal laws regarding the security of the information; and TRE also conducts regular audits to validate that Verify-2 exceeds industry standards, including the Payment Card Industry (PCI).”

As someone who has worked in the IT industry I don’t have much confidence in companies storing my personal information anywhere digitally. No matter how secure a company makes the information using technology, the Achilles heal, in my experience, in most data breaches is traced back to human beings. All it takes is one mistake or angry employee and all the security in place is rendered useless. Multiple times a year we hear of some company having their “secure” databases of information breached. TRE is setting themselves up to be one of those companies and the retailers who use them will, and should, feel the backlash from consumers when it happens.

Consumers can find out if The Retail Equation has any of their personal, identifiable information currently in their system. According to the TRC website:

“Consumers can contact TRE by sending an e-mail to ReturnActivityReport@TheRetailEquation.com or a letter to The Retail Equation, P.O. Box 51373, Irvine, CA 92619-1373. Requests should include the consumer’s name and a phone number where he/she can be contacted. When TRE calls, the company will ask for the consumer’s driver’s license number and state, to enable a database search. TRE representatives prefer to call consumers to avoid sending personal information via e-mail or mail.”

The same postal address can be used to address any inaccuracies consumers feel TRE has in their system.

What we have now is a situation where every consumer is punished due to only 1% of the consumers out there, according to TRE. Is fraud and theft a problem in the retail industry? Absolutely. However, the idea of having a company like The Retail Equation force consumers turn over their personal information in order to get their money back for a product is wrong on some moral level, no mater if it is legal or not.

As is usually the case, it is a buyer beware system out there. Consumers need to look for signage which, TRE says retailers must put up, identifying the usage of TRE’s Verify-2 consumer snooper system. Another option is to avoid giving retailers who use The Retail Equation’s services any of their hard-earned money. Instead go to another big box store or even better a local retailer who will likely give much better customer service and appreciation.

At the time of publication of this article, The Retail Equation does not have a list on their website of all the companies who use the Verify-2 system. Is TRE not proud of its clientele or is the clientele not proud of using The Retail Equation’s systems and services?

Also, it appears in 2002 the New Hampshire Commissioner of Motor Vehicles wrote a letter to Home Depot warning of the legal issues it could face regarding the requirement of giving a state ID from New Hampshire and having someone store the data on it.[1]

Below is a list of retail stores requiring ID to make a return:

  • The Finish Line[2]
  • Best Buy [2]
  • Target [3]
  • The Children’s Place[4]

Upon searching to verify the return policy for the above retail chains, apparently The Finish Line and Target do not want their return policy’s catalogued by search engines, at the time this article was posted. The first result when using the search terms (without quotes) “target return policy” and “the finish line return policy” returned this information”A description for this result is not available because of this site’s robots.txt”. [5][6] The link to the page at The Finish Line went gave a custom 404 error page not found error.[7] The link to the Target page did work correctly.

Please let Clearly Wrong know of any more stores which are requiring an ID to do return or exchange, with or without a receipt, so it can be verified and added to the list.

Source –

References –

  1. New Hampshire Commissioner of Motor Vehicle Letter
  2. The Finish Line Return Policy
  3. Best Buy Return PolicyAccepted ID’s
  4. The Children’s Place Return Policy
  5. Target Return Policy Google Search Results Screen Capture
  6. The Finish Line Return Policy Google Search Results Screen Capture
  7. The Finish Line 404 Error Page Screen Capture
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5 Responses to “Proof of Purchase: Some Stores Require Scanning ID for Returns or Exchanges”

  1. Alicia July 27, 2013 at 12:46 am #

    Please add Sephora to your list. Had a very unpleasant experience and this was the first time I have heard about this, especially from a company that continually promotes open exchanges. Thank you.

  2. Franny September 11, 2013 at 1:10 pm #

    JCrew as well as Bloomingdales.
    This should be illegal. Total invasion of privacy.

  3. Citizens of United States October 19, 2014 at 12:03 pm #

    Best Buy is the WORST of all. It should be illegal to capture, retain and store personal data especially info like date of birth and driver’s license number and when customer produces valid receipt and the same valid credit card upon return. TRE is simply making money here and stores are snooping on customer’s credit history, purchase preferences, spending capability etc. Where is Democracy, What about Citizen Rights and Privacy? Where is any justification for such blatant and arrogant harassment here?

  4. Virginia Shopper October 24, 2014 at 9:26 pm #

    Toys ‘R Us required my driver’s license to be scanned when I brought back an unopened item with a receipt and had paid with a credit card. The return money went right back on the card, however, they still needed my driver’s license and scanned the back of it. I asked what if I did not have a driver’s license and they told me that I would not be able to get a refund.

  5. bill October 26, 2014 at 8:42 pm #

    Home Depot requires a state issued identification or drivers license card for all returns without a receipt or credit card that the merchandise was bought with.

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