SIRAS Strives To Stop Fraudulent Retail Returns
With the pace at which technology changes and improves today, it’s quite possible consumers could replace newly bought electronics by returning them before the warranty expires and upgrading to the newest models, thereby never having to pay the full price again. In fact, many people do. But that’s just one of the problems Tony Sciarrotta, Philips’ director of returns management, was looking to grapple with eight years ago. Millions of Philips SKUs that consumers returned to the manufacturer never should have been accepted by the retailer, either because the warranty or return period expired, the item wasn’t originally purchased at that store, or the item in the box being returned wasn’t the item that was in the box when it was sold.“This was happening a lot about eight years ago when digital products were changing faster than an egg hatches and consumers were taking advantage of that at retail,” Sciarrotta said. “Primarily you had a lot of consumers who were buying product, holding it for a while, bringing it back and getting a new one.”
Sciarrotta discovered that return rates at Philips’ retailers was more than 10 percent, a number he couldn’t accept. Then he remembered that he had seen a SIRAS product demonstration several years before and decided to give it a shot. SIRAS is a point-of-sale scanning system that synchronizes with its own national database. When a customer returns a DVD player, for example, and the clerk scans it in, he will see on his screen when and where the consumer bought the product.
In addition, the clerk is required to scan the UPC code and the serial number of the hardware inside the box. If the two do not match, the system will freeze the register, requiring a manager override to accept the return. “A little message is printed on the receipt explaining why it could not be returned,” said SIRAS President Peter Junger, who added that the company will guarantee manufacturers save more than the cost of the product or else it will refund the difference. “That’s why the retailers have embraced it and put their product categories on it. The profitability is amazing,” he said.