Refund fraud is a significant contributor to loss incurred at a retailer's tills. Losses incurred in this way commonly materialise in inventory loss where it is all too commonly attributed to non-delivery or shoplifting.
A typical incident of refund fraud will involve a cashier issuing false refunds for stock that was never sold and where a customer is not actually present. This method is carried out by the cashier alone simply by refunding by scanning an item nearby, or by entering a known item code or even by using the department key. The value of the refund is normally added to a credit card (often using multiple cards on different occasions), or more recently 'gift cards' or 'refund cards' or simply for cash.
To facilitate easy removal of cards or cash to avoid detection via staff search processes, often a cashier will work together with another off duty staff member or customer.
False refunds are often used as a method of concealing cash theft from tills as the end of day till balances will not show a loss. Refunds with no sales following soon after can be an indicator of such fraudulent activity.
Refunds together with the use of the price override function can be a method of inflating the value of genuine refunds for 'friends'.
Refund fraud is commonly completed by cashiers with some supervisory capability, managers included.