Evan Schuman's StorefrontBacktalk

The Search-and-Send program—which Macy’s started late last year with a few West Coast stores and then expanded to 23 stores (including Dewitt) this year—is designed to let stores not only search the central warehouse and E-Commerce inventories but also have access to the inventory from nearby stores.

The program offers some benefits for fraudsters. The associate in this case would likely have been hesitant to ring up his in-store purchase himself—a policy violation that could easily be detected—and ringing it up through a fellow associate is also dangerous, because the other associate might recognize that the watch should cost $3,000.

But the anonymity of the Web is ideal, because those packers don’t care about pricing. Given that the associate wouldn’t have any ability to change prices online, the fraud would be difficult. Search-and-Send provides the best of both worlds; the price is under the store’s control—and, therefore, the associate’s control—but the shipping option provides the lack of a personal interaction. Had the discount been much more typical, there’s a fine chance it might have never been detected.

Macy’s CFO Karen Hoquet on August 10 told an investor call how much she liked Search-and-Send, which made the chain “more likely to be in-stock when the sales associate searched for an item and, therefore, satisfy more demand. So now, throughout the company, you’re able to go to a Macy’s store and have the associate search the inventory invisible to the sales associate but will pull it from stores in addition to the Internet warehouse. And this is all a part of trying to be able to better satisfy customer demand and also, over time, make our inventory investment far more productive. It’s really quite exciting.”

At least one store associate apparently felt the same way.

According to statements from police and Macy’s loss prevention—statements that may not necessarily be precise—the associate gave conflicting explanations.

A typed loss-prevention statement, signed by the associate,said: “At no time did any manager or supervisor authorize me to process my own transaction, manually mark down the price of the watch or have it sent to my own address.”

A police statement, which he did not sign (the police said he refused to sign), quoted the associate saying: “I placed an order for a watch and made a mistake. When I received the watch, I went to Macy’s and tried to return it.” In a court filing, police quoted the associate as saying: “I purchased the watch at my register. I entered the wrong price. I saw this when the receipt printed. I threw the receipt away.”