Stiffer penalties sought for price tag cheats

CONSUMER FORUM 

Posted April 12, 2015, at 11:25 a.m.
We’ve all seen the signs in stores. The wording may vary, but message is the same: Changing prices is a crime, and marking things down — to fool the people who check you out — amounts to stealing.

In Maine, the losses may amount to $147 million a year. That figure comes from Curtis Picard, executive director of the Retail Association of Maine. Picard told me the loss nationwide could run to $30 billion to $40 billion.

Despite the big numbers, Picard said that, until recently, “it was hard to get this issue to be taken seriously.” Under current law, most price-switching is treated as shoplifting. However, a bill before the Maine Legislature seeks to change that practice.

That bill, LD 310, An Act to Prevent Organized Retail Crime, would make price-switching a Class C crime. A Class C offense also would occur if two or more people, including store employees, act in concert to steal retail merchandise. The bill is focused on a tough and savvy element.

“These criminals are sophisticated,” Sen. Amy Volk, R-Scarborough, the bill’s sponsor, said. “They’re careful to go where the penalties are less severe,” she said, adding that similar crimes in New Hampshire seem less frequent because the Granite State’s lawmakers took a similar, tougher stand on price-switching.

Some thieves carry supplies of barcode stickers into stores they’ve targeted. After finding an item they want, they slap a barcode indicating a lower price over the real barcode. When scanned at the register, the lesser amount is charged. The thief may wait a few days, peel off the bogus sticker and return the item for a refund of the full price.

Surveillance cameras can trip up such efforts. One would-be thief stuck bogus stickers on three identical items, put two back on the shelf and checked out with the third. Loss prevention officers nabbed the thief, who apparently hoped the discovery of two other lower-priced items might divert suspicion.

Last September, a Tampa man was sentenced in federal court to five years in jail and fined $130,000 for conspiracy to commit wire fraud. Court documents showed Robert James Mercer, his co-defendants and others traveled to Wal-Mart stores in Florida, Alabama, Mississippi, Colorado, Texas and other states to defraud the stores.

Mercer and the others purchased prepaid debit cards with cash and received legitimate receipts for those purchases. They altered the receipts to make it appear they bought merchandise. They then used the fake receipts to return items for cash — they obtained those items through the code-switching ploy.

Cynics might say huge retailers, such as Wal-Mart, can absorb such losses. Realists know that, sooner or later, the cost of all such theft is passed along to honest consumers. The crimes hit Maine’s treasury as well, in the form of lost sales tax revenues paid out when crooks make their returns.

Click image to read Wikipedia explanation of return fraud

Some retailers scan a driver’s license or other ID when giving a refund. The data that’s collected is sent to a company specializing in creating “returner profiles.” If it detects an odd return pattern, it notifies the retailer, which then may not accept returns from that consumer for a period of time. Privacy advocates have voiced concerns about the collection and retention of data.

Volk’s bill is pending in the Legislature. Whether it passes may depend in part on whether it carries a fiscal note — that is, whether there will be any cost to implement changes the bill would require.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

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