Many Unhappy Returns

It’s inevitable.  As the holidays draw to a close, many of us will have received a well-intended gift that we may not like.  Whether it’s a matter of the wrong size or color, a defective product, a duplicate gift, or just something that we just “don’t want”, it may become necessary to return the gift to a retailer.  Retailers have different policies (and states have different laws) concerning the ability to return unwanted merchandise.  But, one thing that troubles many privacy conscious consumers is when retailers require a driver’s license (or other government-issued ID) for returning or exchanging merchandise.  

Why do some retailers swipe your driver’s license?

Retailers say they do this to keep better track of possible return fraud. Typically, they will swipe your license in a reader that will query a database to look at your return history for patterns of fraud or abuse.  By scanning your license, the retailer can collect any information that is encoded on the license's magnetic stripe or bar code. In most states, this information includes the data printed on the face of your license, such as name, address, date of birth, and license number.  

What is The Retail Equation?

Some retailers manage merchandise returns with an in-house database while others use a central reporting company called The Retail Equation (TRE).  TRE gathers and supplies the data that subscribing retailers use to make return authorization decisions, and helps them determine their own return policies.  TRE does not actually set the return policies for participating retailers, but is widely used.  It announced in December 2014 that it had authorized more than 600 million return transactions.

When retailers use tools like TRE and in-house databases to analyze return behavior, it means that if you make repeated returns or exchanges to a specific merchant, you could be refused a return in the future. Refused returns generally fall into two categories:

  • Returns that break the retailer’s basic return policy (such as a return without a receipt, a return after the allowed return period, or multiple returns beyond the quantity of returns allowed by the retailer within a given period).
  • Returns that make a consumer’s overall return behavior appear to be return abuse.

How do you know if TRE has information on you?

Consumers can order a copy of their Return Activity Report from TRE. This report is a history of all your return transactions in those stores that use TRE. The report lists return activity information including the stores you have returned to and, for each return, the date and time, whether it was with or without a receipt, and the dollar amount.

You may obtain a copy of your return activity report by sending an email to: You should include your name and a phone number where TRE can reach you. When TRE calls, the company will ask for your driver’s license number and state, to enable a database search. TRE states that they prefer to call consumers to avoid sending any personal information via e-mail. 

What should you do if TRE has inaccurate information on you?

TRE offers consumers the ability to dispute their Return Activity Report. If a consumer identifies any inaccuracy in their information or needs to change information in TRE’s files, they should notify TRE in writing at The Retail Equation, P.O. Box 51373, Irvine, CA 92619-1373.  TRE will then investigate and update their records.

Is there any way to refuse to provide your information in a return?

You will likely have to comply with whatever the retailer’s return policy says.  California law specifically allows a retailer to swipe your license "to collect or disclose personal information that is required for reporting, investigating, or preventing fraud, abuse, or material misrepresentation."  The California Attorney General has stated that if a store reports to a central reporting company and uses this as the basis for denying a return, this policy must be prominently posted in the store.

So before you go back to the mall to return that unwanted gift, be sure to understand the retailer’s return policy and how your privacy may be impacted by the return transaction.  Feel free to contact us with your privacy questions and complaints about retailers or other privacy issues.