Fraud comes in a variety of ingenious forms and schemes, so it is not surprising that some merchants have become victims of thieves who can steal without even leaving the store. The scheme known as “Return Fraud” is a crime where people exchange stolen goods for cash, use counterfeit receipts or bring back items to merchants that have already been worn or used. Some bold fraudsters simply pick up merchandise from store shelves and take it to the customer service counter for a refund. One mid west fraud ring, aware of lenient store return policies, started returning items to the stores without receipts in exchange for store credit in the form of gift cards. They would then sell the gift cards at a discount.

Return fraud involves obtaining money or property by use of deceptive means. Like shoplifting, it is a type of retail fraud that is viewed in the eyes of the law as petty theft and, as such, requires proof that an item was taken intentionally (not accidentally), with the intent to steal.

Also like shoplifting, return fraud is often charged as petty theft. Petty theft crimes are some of the most common theft crimes charged by prosecutors. While the vast majority of petty theft cases involve shoplifting, return fraud can be charged as petty theft under California Penal Code Section 484(a) and California Penal Code Section 488 PC which includes any theft crime that meets the following criteria:

The value of the property stolen is $950 or less.
The property was not taken directly off another person (such as a robbery or mugging offense)
The item stolen was not a gun or an automobile.

Under Penal Code section 484, any person who uses fraud or deceit to obtain possession to money, labor, or real personal property is guilty of theft by trick. Theft by trick is defined as using fraud or deceit as a means to obtain possession of another’s property.

Daniel R. Perlman, Esq.

Law Offices of Daniel R. Perlman