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Retailers Caught Up in the Opioid Epidemic

A CNBC investigation has found that major retailers have been targeted by people seeking money for drugs who finance their activities by stealing items and taking advantage of stores’ return policies.

According to CNBC, some addicts have found their way to pay for their drugs by getting money from stealing items in large retail stores, including Walmart, Target, Lowe’s, and Home Depot. After sneaking products out of the store, they come back to return the items they took. The fact that they don’t have a receipt is not a big problem, as some retailers’ policy is to issue gift cards to returns without receipts. Thieves later sell the gift cards to a physical buyer, who then resells them online at a discounted price, or the individuals sell the cards online directly themselves.

Retailers are aware of this issue and state they are doing everything they can to reduce fraud, but drug users consider this scam to still be very easy to pull off. Retail-return fraud continues to be a significant issue in the U.S., and not just with addicts seeking funds for their next fix.

The National Retail Federation found that 57 percent of firms reported incidents of fraudulent gift cards or store credit in at least one store location. The total loss of money due to retail return fraud amounts to $9 billion to $15 billion a year. The Coalition of Law Enforcement and Retail sees the fraud-drug connection as a top priority and is aiming to solve this problem. New software is in the works that promises to help track the number of scams related to gift cards.

Usually, after receiving a gift card the scammers go to a pawn shop or business that buys their card at a significant discount and then sells them to an online exchange. Those exchanges then sell them back to consumers at an amount usually just below the face value. One company found a particularly shocking example in which a person sold $349,000 worth of illegitimate gift cards in a three-month period. Tennessee has found a direct connection between opioid overdoses and gift cards. Police have linked over 16 overdose cases to a sale of a gift card during a one month period and between 83 to 98 cases during a three-month period.

While this may not seem like an issue that directly affects consumers, it has significant ramifications. The losses retailers incur when items are stolen and fraudulently obtained gift cards are used are passed back down to consumers in the form of higher prices. Stricter return and gift card policies could hurt law-abiding consumers. This problem has real-world consequences everyday consumers.

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