DENVER (CBS4)– It’s an illegal business worth billions and the holiday shopping season is the prime time for return fraud. Thieves take items off store shelves and then take them to the return counter, pretending to have purchased the item.

Some of the biggest retailers are victims of the scam, including Walmart and Home Depot. One company with several locations along the Front Range is being investigated in connection with merchandise cards being sold for cash.

(credit: CBS)

(credit: CBS)

“They are essentially giving out gift cards for items that were stolen from them to begin with,” said Joseph Morales with the Denver DA’s Economic Crime Unit.

Those cards can be turned into cash. One store located on East Colfax, with other locations in Colorado Springs and Pueblo, pays about 71 percent depending on the value of the card.

The store apparently resells those merchandise cards to a company called Cardpool which operates online buying gift cards and then reselling them.

According to a police search warrant, Cardpool notified law enforcement that they were moving an “abnormally large amount of return merchandise cards… through their system.”

Undercover investigators sold cards at the stores and strongly hinted they were the result of shoplifting. One investigator also stated he “needed my people to go and take more stuff from Walmart.”

The DA’s office said retailers need a way of determining whether those returned items were paid for.

“Items that are stolen should not be allowed to be returned and be confiscated,” said Morales.

At Toys ‘R Us returned items are coming under scrutiny. Consumers not only have to present their driver’s license but the information is also scanned into a computer database that can track returns at all the locations.

The Better Business Bureau believes returning merchandise without a receipt is getting tougher.

“They are not as lenient as they used to be because of these shopliftings or other scams they are subject to,” said Better Business Bureau spokeswoman Adriana Carmona.

CBS4’s calls to Cash for Cards were not returned. CBS4’s Rick Sallinger attempted to inquire about their practices at the Denver location.

“How do you know you are not dealing in merchandise cards that involve stolen items?” asked Sallinger.

The clerk said he couldn’t say anything about that.

Investigators believe the money is often used for drugs.


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