What do you think about 'friendly fraud?'

I know someone who used to buy fairly expensive items in New Hampshire which has no sales tax and return them at the same chain or big box store in Ma. or Ct. without the sales slip. The net gain would be the sales tax. Nowadays stores like Wal-Mart or Home Depot are on to this and will not return the sales tax without a receipt. Some stores now require identification for returns and I assume there is a data base to track abusers.

This unseemly behavior has forever changed my opinion of this individual.

Actually, we have a company where people like you described who commit friendly fraud day in and day out; however, we use a friendly fraud solution from a company called DocVerify, and we've seen our friendly fraud incidences slowly drop. If you even have one friendly fraud incident then you definitely should consider using their solution. We're glad we did.

Quote: EvenBob

It doesn't bother me in the least to occasionally
take advantage of a billion dollar company like
Walmart or Target. For instance, over years if
I have a dead battery in the parking lot of one
of these huge stores, I'll buy a battery to drive
home, charge the old one, and take the new
one back for a refund. No harm done and it
was much faster than road service.

I guess no harm done to YOU, anyway. Didn't do the now slightly used battery any damn good, or the unknowing eventual purchaser.

Quote: 1BB

I know someone who used to buy fairly expensive items in New Hampshire which has no sales tax and return them at the same chain or big box store in Ma. or Ct. without the sales slip. The net gain would be the sales tax. Nowadays stores like Wal-Mart or Home Depot are on to this and will not return the sales tax without a receipt. Some stores now require identification for returns and I assume there is a data base to track abusers.

This unseemly behavior has forever changed my opinion of this individual.

He has stolen money from a taxing jurisdiction that considers if not very friendly.

Not sure if this falls into the category of "friendly fraud" or not, but the comments on sales tax reminded me of it. Here in Arizona, not too long ago, there was some legislation proposed to increase the sales tax rate by 1%, with said increase in monies going towards education, some in the form of salaries for teachers. The measure was passed. Naturally, I have a friend who is a school teacher, who was willing to go on and on about how this tax increase was so important, not only for her, but for all teachers, and education of students.

Fast forward a few months past the enactment of the increased tax rate, and said friend needs new tires for her truck. Since she has a friend of a friend of a friend who is a car dealer, she was able to use that person's connections to purchase the tires without having to pay sales tax.

Getting around sales tax is a common theme in the business world. But lecturing others on why they should vote for a 1% sales tax increase, and then dodging the sales tax yourself, struck me as more than a little unethical.

(1) This is not fraud. If the terms and conditions are such that a person can return the goods or services simply because they are not satisfied, the company has factored this into the price. The goods would be thrown out anyway. Now, if you're a person with a sense of ethics, you won't get money back for something you were actually happy with. My wife has had people who have obviously used the product that she sells and had them return it. Disputes have been filed, and in the online world, my wife has no choice but to refund the recipient.

(2) This is fraud. You used the product or service and you're lying. This has happened to my wife (who sells things) many times.

(3) Returning items to the store because you are not happy with it is a valid excuse. Stores with excellent customer service jack up the price to expect these returns. I've bought things that I've never happened to use and returned it. I've worn shoes once and returned them. Subscribing to magazines under a free trial or using "bill me later" is also valid (bill me later is a free trial). The price of the non-pay "bill me laters" is built into the price of the magazine.