SINGAPORE (June 4): On any given day in the US, a store manager attends to a customer who has brought an item in for a refund, but without an original receipt. It is likely the customer has lost the receipt, or the item is a gift. But there is also a chance the item was stolen, and the person standing in front of the manager is scamming the store. Which is it?

According to the US National Retail Federation, some 10% of goods sold last year, or US$350 billion ($470 billion) worth, were returned to stores. Many stores tend to accept returns without a receipt, and a few major ones give customers store credit in lieu of money back. Unsurprisingly, this opens retailers to fraud, as people may be returning items that have been stolen in exchange for cash or store credit. NRF estimates that 5% of total returns last year were fraudulent. It seems a small proportion, but works out to US$17.6 billion. Returns are also a logistical headache, as items are not put back on shelves but consolidated and sent back to the distributors, leading to extra costs.

To counter such cases of fraud, the largest retailer in the US, Walmart, has deployed a fraud prevention system sold by tiny, Singapore-listed DISA. And DISA is primed to get at least two other top retailers — Target Corp, and The Kroger Co, which runs grocery chains — to use its technology. This will drive DISA’s growth from next year, CEO Eddie Chng tells The Edge Singapore in an interview. “Come 2019, we can expect triple engines behind us,” he says, in reference to the three retailers.

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