{"id":7250,"date":"2021-03-14T13:34:24","date_gmt":"2021-03-14T11:34:24","guid":{"rendered":"http:\/\/localhost\/salient\/?p=7250"},"modified":"2024-02-14T13:06:09","modified_gmt":"2024-02-14T11:06:09","slug":"breaking-through-refund-fraud","status":"publish","type":"post","link":"https:\/\/staging3.zealousys.com\/salient\/breaking-through-refund-fraud\/","title":{"rendered":"Breaking Through Refund Fraud"},"content":{"rendered":"[vc_row type=”full_width_content” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” class=”single-post-section” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\n
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Virtually all South African retailers offer their customers a period within which the customer may return items purchased.\u00a0 Whilst the Consumer Protection Act prescribes flexibility to consumers wishing to return goods that meet the conditions set out in the Act, it is also considered good practice by retailers to accept customer returns.\u00a0 As much as retailers\u2019 customer returns mindset is geared at building lasting relationships with consumers, it is regrettably also an area where shrinkage is unavoidable. \u00a0(Shrinkage is the term used for any financial loss the retailer incurs during the items returned and refund process.)<\/em><\/p>\n<\/div>\n<\/div>\n

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Retailers are at times placed in the position of having to transact a return or refund merely to retain a customer, despite the reasons or circumstances of the return or refund being border line acceptable.\u00a0 It is also an area of employee fraud risk.\u00a0 In this article, we unpack how risk enters the client services space and offer a solution to greater visibility of this risk.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n[\/vc_column_text][vc_column_text]\n

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Understanding the risk<\/h4>\n<\/div>\n
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It is estimated that in South Africa, shrinkage is as high as 5-7% of turnover.\u00a0 Shrinkage includes administrative errors, theft (by shoppers or employees) and fraud.<\/p>\n<\/div>\n<\/div>\n

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In the customer returns and refunds space, a collusive relationship between a customer and an employee can have staggering financial implications for the retailer if the employee is in the position to approve returns or refunds in favour of their colluding partner.\u00a0 Where collusion occurs between a customer and an employee, it can be virtually impossible to identify as the collusive relationship is by its very nature surreptitious.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n[\/vc_column_text][vc_column_text]\n

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Mitigating risk with Ecentric<\/h4>\n<\/div>\n<\/div>\n
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Designed to deliver financial certainty in the retail space, Ecentric ReconAssistTM software reconciles transaction data from point-of-sale systems, to switch transaction data, and ultimately to the bank settlement resulting in retailers receiving correct (at transaction level) tender value per sale. One of the many features of the software is the extent of data assimilated to perform the reconciliation. Because the reconciliation occurs at transaction level, the data is equally collated at the same level of granularity.<\/div>\n<\/div>\n
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This data provides an accurate source for data analysts to extract insights that could signify potential business exposures that warrant further investigation.\u00a0 Because workplace fraud is usually performed in a manner that includes concealment, the interrogation of the data is a critical internal control discipline to ensure concerns such as a greater frequency of refund or return approvals for particular employees, are identified and assessed.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n[\/vc_column_text][vc_column_text]\n

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The purpose of ReconAssistTM<\/sup><\/h4>\n<\/div>\n<\/div>\n
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ReconAssistTM\u00a0<\/sup>reconciliation software<\/b>\u00a0is designed to perform an automated, overnight reconciliation for store and back-office staff to interrogate the following day, resolve settlement discrepancies, etc.\u00a0 The software accelerates and significantly streamlines the overall reconciliation process.<\/div>\n
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It is designed for the reconciliation of:<\/strong><\/div>\n<\/div>\n