Walmart Couponer’s Return Fraud Conviction Upheld

Is it a crime to buy items using coupons, for the sole purpose of returning those items for a full refund?

According to a California judicial panel – it depends.

Well, that clears everything up!

A state appeals court this week upheld the recent burglary conviction of a Walmart “serial returner”. Jesse Emerson Isom of Bakersfield, California, was accused of making purchases using coupons at several local Walmart stores, then making a profit by returning them to other Walmart locations for a full-price refund.

That’s despite the fact that Walmart allows this. In Isom’s case, though, he was tripped up by something of a technicality – and his own ignorance.

In a perfect world, if you return something you bought using a coupon, you’d be refunded the money you paid, and get your coupon back. In reality, it’s more complicated, since the store likely doesn’t have your coupon readily available.

So there are a couple of imperfect alternatives. If you’re refunded the full price of the product, then the manufacturer is essentially subsidizing you for not actually buying its product. If you’re refunded the out-of-pocket price that you actually paid, then the store will likely get reimbursed for the coupon, and then they’re the ones getting subsidized by the manufacturer for not actually selling its product.

There’s no consensus as to which is the least imperfect answer, so retailers tend to have different policies on how to handle such returns. Walmart generally gives full price refunds, regardless of whether coupons are used.

Isom was convicted of taking full advantage of that policy – even though he wasn’t aware of it. And that’s what tripped him up.

In June 2013, the appeals court recounted, Isom was arrested for returning a shopping cart full of items to a Murrieta, California Walmart with an altered receipt from another Walmart. Isom told police for the previous couple of months, he had been buying items using coupons at various Walmart stores, then forging his receipts in order to return his items to other Walmart locations for a full refund. He “would take the original receipt; cut off the subtotal and total, so as to remove the discounted price; then copy the receipt to his own receipt paper to make it appear as though the receipt had not been altered and that he had paid full price.”

That, according to the prosecutor, constituted forgery, which was the basis for Isom’s burglary conviction. Yet, considering Walmart’s return policy, if Isom had just used his original receipt and not altered it, he still would have gotten his money and would probably never have been arrested at all. So not only were all of Isom’s efforts to create his own receipts unnecessary, they were incriminating.

In essence, ultimately, the prosecution argued and the jury agreed that the receipt forgery was the crime, not the return fraud.

Isom’s attorney objected to that determination, arguing that altering receipts did not constitute a crime, and that there was not enough evidence to prove any intent to defraud.

The three appellate justices disagreed. The forgery and the fraud were interrelated, they ruled. Forging a receipt may not be a crime in and of itself, nor is returning items bought with coupons for a full refund. But forging a receipt for the purpose of profiting from a return – even if the store policy meant that forgery wasn’t necessary – is indeed a crime, the court determined. “The fact that he did not need the altered receipt does not cause him to be innocent,” the justices wrote.

The lower court judge who presided over the trial explained how using coupons to return items for profit was actually, technically, completely permissable. A customer “could literally, under the store policy, push the cart straight from the cashier across the way to the customer service location and receive the benefits of what would appear to be institutional policy and gain a windfall from the return of that property,” the judge stated. “If a person does everything without altering the receipt, or even without the receipt, there’s no violation of law. You can go into the store, use your coupons, make 400 bucks and go home, and apparently Walmart doesn’t care, nor does the law.”

But that, according to the appeals court, still doesn’t make it right. Isom apparently “believed Walmart would be reimbursed by the manufacturer” for his coupons, and therefore “he was not harming Walmart,” the court stated. But “if a person steals an item believing the victim is insured and will be fully reimbursed, that does not make the person any less guilty of theft.”

In Isom’s case, the receipt fraud made it a matter of black and white. But overall, the legality of return fraud continues to be something of a grey area.

Before you decide to take advantage of this apparent legal loophole, though, consider that retailers have other ways of combating serial returners. If they’re onto you, they can refuse to sell large quantities of items to certain individuals, or ban them from the store altogether and have them arrested for trespassing if they return.

If nothing else, Isom is well aware of Walmart’s return policies now. And just in case he gets any ideas, you can bet his local Walmart will be watching out for him – just as soon as he serves out his four-year prison term.

Photo by JeepersMedia