Big brother is watching you... shop.

That’s right. Businesses can contract with a service called The Retail Equation, which will keep a digital eye on your return habits.

It’s true that return fraud -- which ranges from returning stolen merchandise for cash to what’s known as “wardrobing,” or buying and using items that a shopper doesn’t intend to keep -- is a big problem for some stores, but are you, the consumer, willing to give up some of your privacy to help?

Depending on where you shop, you may not have a choice.

Reader Rob Chadwick alerted Bamboozled to the service after he tried to make a return at The Home Depot in East Windsor. The experience reminded him of our column last month about why consumers should keep their driver’s license number private.

“I’m glad to know that I am not the only one that does not want to share my driver’s license with everyone that asks to see it,” he said.

Chadwick purchased an item with a gift card at The Home Depot the month before. He decided he didn’t need the item, so he returned to the store with the original receipt to make a return.

The clerk asked him for his driver’s license, and he refused.

“The rep said that they needed it to confirm my identity with NJ DMV,” he said. “I knew this was not true and asked for a manager. The manager came over and said their computer system required the driver’s license number and there was nothing she could do about it.”

Chadwick said he asked the manager what would happen if someone did not have a driver’s license. She said the return would be refused until a license was provided.

“I asked where it stated this since the receipt said nothing about returns and the store was under renovation so there were no signs up at customer service,” he said. “She said it was detailed on their web site and I could call their 800 number if I wanted to complain. The guy behind me started telling me I was an idiot and I should just give them my driver’s license so I walked out.”

When Chadwick got home, he hunted online for more information.

He came up with a gem, which Chadwick said is the reason the store wanted his driver’s license number: The Retail Equation.

“Your personal information is entered into a huge database and like a credit score, they tabulate how many returns you do and if you go over the limit, you are denied returns,” he said. “The worst part is that they won’t just deny returns to Home Depot, but to any retailer that participates in The Retail Equation.”

He’s right.

The Retail Equation describes itself as helping retailers prevent fraud and abuse using its technology, “which uses statistical modeling and analytics to detect fraudulent and abusive behavior when returns are processed at retailers’ return counter.”

It’s a weapon against serial returners.

It says the system “is designed to identify the 1 percent of consumers whose behaviors mimic return fraud or abuse — a $14.3 billion to $18.4 billion per year problem in the United States.”

It also says those losses lead to between $870 million and $1.1 billion in state sales tax revenue losses.

How does it work? According to The Retail Equation web site: “When a consumer wants to make a return, a retailer will scan the original sales transaction receipt and/or swipe the individual’s driver’s license or government-issued ID card to make an identification of the person and his/her unique return behavior. As customers return merchandise, the system compares variables such as return frequency, dollar amounts and/or time against a set of prescribed rules that form that particular retailer’s return policy.”

Apparently 99 percent of returns are accepted.

The system captures the identification number, name, address, date of birth and expiration date of a driver’s license or other photo ID. The info is then stored in a “state-of-the-art, secure data center.”

We asked The Home Depot about its return policies, and there are few circumstances in which a government-issued photo ID isn’t needed. Returns for purchases made with a credit or debit card that are accompanied by the original receipt don’t require ID as long as the card will be credited. Otherwise, no ID, no return.

"While we want to maintain a customer-friendly returns policy, The Retail Equation system helps us minimize returns fraud; which is often tied to bigger organized crimes such as drug trafficking, and even terrorism," said spokesman Stephen Holmes in an e-mail.



Want to know what The Retail Equation has on you? Email a request to ReturnActivityReport@TheRetailEquation.com, or write to The Retail Equation, P.O. Box 51373, Irvine, CA 92619-1373. Include your name and phone number, and you'll get a return call. Don't be surprised here — the rep will ask for you your driver's license number and your state to search its records.

LOAN PAYMENTS FOUND

The accounts have been settled.

We told you earlier this fall about Betsy Brevitz, whose student loan payments were misplaced when her loan servicer changed. She got nowhere with her many calls to Direct Loans, the original loan servicer, and EdFinancial, the one who took over the account, so she called Bamboozled.

We asked for intervention, and the missing payments were found.

“Both of the missing payments posted to my EdFinancial account on Sept. 11 — five-and-a-half months after Direct Loan received the March 30 payment, and four months after they received the May 2 payment. Hurray!”

Because those payments could not be found previously, Brevitz had been denied a forbearance that would have reduced her payments from $958 per month to $500 per month for 12 months as she works through some personal financial challenges.

“Rather than giving me 12 months of reduced payments, EdFinancial has given me five months of no payments,” she said. “I’m not sure why they did it this way, but I’m okay with it. I will send them $500 a month anyway.”

She said EdFinancial also sent her a detailed letter explaining what happened with each payment. In short, the letter said Direct Loan had placed the payments in a “suspended” status while it decided what should be done with them — despite all of Brevitz’s calls for help.

“I find it fascinating that EdFinancial, who did nothing wrong, wrote a detailed explanation of what the other guys had done with my money, whereas Direct Loan claimed repeatedly to be unable to find the money and, when called out by a reporter, left a voicemail apology with no return phone number,” Brevitz said.

We’re glad the payments were found.

CEMETERY SATISFACTION

Last summer, Louis and Ziara Neapolitan feared that when they eventually die, their family would be stuck with a hefty bill.

The couple purchased a pre-paid crypt for two at Woodbridge Memorial Gardens back in 1977, and they recently learned that according to the cemetery, not all the costs were pre-paid.

During a sales call to the couple, in their early 90s, a salesman said entombment costs were not included. He offered a pre-paid entombment package costing $1,100 per person.

That was sticker shock for a couple who believed the costs were already paid for through their initial contract.

The contract, actually, was the problem.

The Neopolitan’s contract was different from the one the cemetery had in its records. The cemetery’s version had a stamp on the right that says, “DOES NOT INCLUDE FEE FOR ENTOMBMENT SERVICES” while the couple’s version had nothing of the kind.

After their story was featured in this space, the cemetery made an offer: $475 per person for pre-paid entombment, which is the same price charged in 1977 when the couple purchased the crypts.

They took the deal.