This common shopping scheme could be driving up the prices you pay

People buy an item online, they use it once, and then they return it. It sounds harmless, but that return could actually be costing you more than you realize. In Boston 25 News, Consumer Advisor Clark Howard explains return fraud can raise the price you pay at checkout. At Happy Returns in Valencia, California, I got a first-hand look at how they use robots and AI to fight back against fraud and refund your money faster. Juan Hernandez Campos of Happy Returns says that when products arrive at a warehouse, they're unloaded and sent to sorting stations. I take the QR code of the item. Once it's successfully registered it, I put it here on the robot and then I tell the robot, you're good to go. These robots quickly find the right box that will be sent back to the retailer. A process that used to take days to complete can now be done within an eight hour workday. What we're focused on in this facility are what we call decoy returns. That's when someone sends back a less expensive product similar to the one they bought. So, something about it made it suspicious. Yes. It gets in your hand right now. What are you learning by photographing it? What AI is really good at doing is picking up on details that somebody at the drop-off location might not have caught. Happy Returns tells us most fraud is caught at the drop-off facilities. But when it does end up here and gets flagged, it's scanned at this AI fraud detection station. It's saying this is a suspected mismatch, so AI thinks this is fraud. And now me as a human, it's my job to go and say, is that correct? Fraud is a bigger problem than you might think. One in ten returns. That's billions of lost revenues that get passed down to you, the customer. It can also lead to stricter return policies, return fees, or even get you banned. And it's not just large corporations dealing with these issues. It's like disappointing inhumanity when that happens. It's something Julie and Scott Chapin understand firsthand. They own CakeSafe, a small business that makes reusable cake delivery boxes. They've had to change their return policies and charge restocking fees because of return abuse. It may very well be a cost somewhere that somebody's picking up because you're... Being dishonest about something. Back at Happy Returns, the end goal, cutting down on fraud, helping to save you and me time and money. Consumers will pay for it if this process doesn't work. We are. Thank you very much. A new thing with returns, this is how much they're costing retailers. You can get a cheaper price up front when you buy just to give up your right to return. Amazon is experimenting with it through its Woot site. If you know you're buying something you're going to keep, get the cheaper deal up front. I'm Clark Howard.