Is Wal-Mart profiting from returns?

If you were one of the 226 million shoppers who spent an average of $398.62 on Black Friday weekend, making sure you had gift receipts for every purchase may not have been uppermost in your mind.

But even if you did, that might not guarantee that those on your gift list will be able to get a full refund on those items.

Last week, KATU in Portland, Ore., reported that Wal-Mart did not refund full value on items purchased using a gift receipt. 

KATU reporter Shellie Bailey-Shah tested gift receipt policies at Target, Wal-Mart and Fred Meyer by purchasing Halloween items in early October, then returning them after the holiday, when they were on sale. Bailey-Shah got full refunds at Target and Fred Meyer, but about 15% less than she paid at Wal-Mart, even after the clerk manually entered the items.

How gift receipts work

The beauty of a gift receipt, from the giver's perspective, is that it doesn't say how much you paid for something, but allows the receiver to discreetly return it if they want. The receipt identifies the store where an item was purchased and contains a bar code that can be scanned to recall the original transaction.

Ideally, the gift receipt lets the owner get a refund (or store credit) for the same amount you spent, even if the item has since gone on sale.

But say that Mom uses the gift receipt to return that sweater you sent he. She doesn't know what you paid for it, so she wouldn't know if the store gave her less and makes a small profit.

A wide-ranging problem

In May, investigative teams with CBS stations in Sacramento and Philadelphia found that several Wal-Marts weren't giving full value on gift receipts, CBS News reported. When questioned about the discrepancies, store customer-service representatives explained that without original receipts, they could only refund the amount that came up when they scanned the bar code -- usually the current in-store price for those items. Post continues below.

Sacramento's CBS station checked on the chain in September, and found the problem persisted, but reported no problems in its investigation earlier this month. CBS 3 in Philadelphia found the problem was ongoing in a report Nov. 15.

In August, the CBS station in Dallas/Fort Worth found a similar problem at Wal-Marts in that area, as well as at other chains in North Texas. Reporters had trouble getting full refunds using gift receipts at Ann Taylor Loft, Carter's and Sports Authority stores in Dallas, CBS 11 reported.

In May, U.S. Sen. Barbara Boxer, D-Calif., asked the Federal Trade Commission to look into the gift receipt situation at Wal-Mart. "In most circumstances, people returning gifts are unaware of the cost of the gift, making it easy to take advantage of these customers. A gift receipt should be honored at the identical amount originally paid for the item," Boxer's letter said.

Several law firms filed a class-action lawsuit against Wal-Mart in June, asking the company to turn over years of records on billions of store returns.

"Wal-Mart's scheme to defraud relies on the fact that people generally have good manners and would never ask how much their gift giver paid for their present," lawyer Bill Kershaw said.

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