“Wardrobing” is a Major Problem and Getting Worse

In the retail industry it’s called wardrobing. That’s the return of used, non-defective merchandise.  And 61.4% of retailers have dealt with this problem, says a study released last week by the National Retail Federation. That’s up twenty percent from just two years ago, when the estimate was a still serious 42% of retailers dealing with this problem.

Buy/Return or Shoplift/Return

We’ve discussed the problem of return fraud in the past. For example, look at this article about Shoplift/Return Cycle. It’s a related problem. But with wardrobing the product is actually purchased, though there’s no intention of keeping it after use.

The Challenge for Retailers

Like most retail loss prevention issues, it creates a dichotomy. Fast, convenient return policies make for happy customers and often increase sales. On the other hand, overly lax return policies often result in people returning merchandise stolen from your store (that means you’re being robbed twice!!) or returning products from other stores. Sometimes consumers get the feeling that it’s ok to return merchandise that they’ve used.

It’s not. You can’t sell used or damaged merchandise as new.

What Can Retailers Do?

You can develop restrictive, though reasonable return policies.

A few approaches might be:

• Require identification, and keep an internal database of returns.
• Use a service that provides a database of return activities across stores and chains.
• Require receipts for cash returns.
• Only issue refunds in the same method of payment as the original purchase.
• Consider a restocking fee for open, non-defective merchandise.
• Train employees to recognize return fraud.
• Utilize inexpensive return fraud tags, like the Shark Tag, that can be effective at deterring wardrobers from purchasing, using and returning items for a full refund.

Whatever you do, make sure your return policy is understood by customers. Signage and communication helps accomplish this. Ultimately, choose an approach that matches your needs, balancing customer service and loss prevention.

Contributed by Alan Herbach, who is President of American Theft Prevention Products, Inc. (www.AmericanTheftPrevention.com) which provides retailers with tools to effectively combat shoplifting. Alan can be reached by email at aherbach@AmTheft.com and can be followed on Twitter under the name AmTheft. He writes on loss prevention issues at blog.AmericanTheftPrevention.com 

For some, the idea of e-receipts can be intimidating. It’s just one more thing to depend on technology for. Many small retailers and independent retailers already feel behind in the technology trends for retailers. Here’s the catch, though…. E-receipts don’t have to be difficult. In fact, they are meant to make your life easier.

Depending on your POS provider or your own personal operations set up, e-receipts offer the chance for you to to the following:

1. Quickly provide customers with proof of transaction without having to print anything – saving paper (and your overhead expenses) while also being green. An added bonus? No more paper receipt packed wallets for your customers!

2. Collecting an email address to mail an e-receipt allows you to gain their email for other marketing purposes. This reason alone is enough of a reason to want to get on board with the e-receipt band wagon. Make sure at the bottom of your receipt you offer an “out” button for people who may want to unsubscribe  to your email marketing. It’s likely most will not opt out, so you will gain a lot of eyes here.

3. Return procedures can be better managed with e-receipts since you will have a history of receipts sent, as well as customers can’t “lose” them as easily. As we all know, what’s on the internet stays around forever. There are perks to that, after all!

Now the reality is not all customers will be in favor of an e-receipt. And that’s okay. The option for a printed version or an emailed version should be your first goal. Where the future will take us only the future can tell in regards to retail receipts. But to get familiar with this new trend can’t hurt. In fact, it will likely help you in many ways.

[tweetmeme]While returns hurt – literally – and exchanges don’t always add up and often cause chaos in store inventory, displays and customer communication, this time of year is a great time for your store to shine. Hopefully you started the season with a clear, easy to understand return and exchange policy in check. This will ease any confusion customers may have on what can and cannot be exchanged. If you didn’t, this is a great chance to make some changes in the year ahead. Whether you have a great policy in place or not, the fact remains that you need to smile as you deal with the business of the holiday aftermath.

Make sure any employee working the cash register is clear on how to handle returns. This includes processing the return payment via credit card, check and cash. Based on your policies, your refund procedure should be understood and issued accordingly, with no exceptions. Employees need to be reminded to smile and thank all customers, even when they are leaving the store empty handed but with a thicker wallet.To help encourage exchanges, however, employees should be instructed to offer customers the opportunity to browse the store and look for something in exchange for what they are returning. If a quick “no” is given by the customer, employees should continue with the return transaction without hesitation and yes – continue to smile.

While customers may leave the store without a shopping bag, they don’t need to leave empty handed. Provide them with an incentive coupon for an upcoming sale or special event that will help lure them back to your store. And even without a shopping bag, they can still leave having had a great customer service experience. That’s something worth remembering and something that will likely bring them back to you store!

Like all costs, anti-theft programs and equipment require an understanding of what you can expect from your dollars spent.

In the case of Security Cameras (CCTV) systems, you can expect some degree of deterrence. But unless you’re a large retailer and spending the money to have someone watch monitors all day long, its deterrence impact is limited. Video recordings are particularly effective, however, in the area of prosecution (…if you use quality cameras and quality recordings. When you can’t clearly indentify the criminals, they are of limited value). CCTV is also effective in monitoring and spot-checking employees, particularly at cash registers, or when you may already have some suspicion.

For most retailers theft prevention and deterrence is preferable to prosecution. Preferable both in terms of cost effectiveness and peace of mind.

All loss prevention tools have their place and limitations.  Understand the role of each tool you use. Implement a multi-pronged approach to theft deterrence reflecting your situation.

Electronic Article Surveillance (EAS) systems, when effectively implemented, are another good prevention tool. Small tags attached to merchandise set off electronic alarms at your doors. They’re more effective at deterrence than many other tools, sending potential shoplifters to unprotected stores as well as alerting you to unauthorized products leaving your store.

But you do have to think about the products you’re safeguarding and the best way to protect them. Tags are available to secure just about every type of merchandise.  If you’re implementing a system like this, work with your supplier to make sure that the tags and tools you’re using are effective for your product mix.

Packaging has also been proven to make a difference. Many of us remember the long CD boxes that used to help prevent pocketing of music. Those are no longer in use as manufacturers have cut back on packaging cost and reduced waste packaging. The problem is that cd’s and dvds are now easier to hide and steal. 

Other high theft items — cosmetics, bottled items, electronics, gift products …anything small enough to easily conceal and remove from your store — face the same problem.

In this era of  “Green Merchandising,” protective packaging, such as “Keeper” (or “Safer”) boxes can be effective at theft deterrence. Reusable locking polycarbonates boxes allow the product to fully seen in its original packaging, yet make it difficult to pocket. You’ve probably seen these in use at just about every electronics and office supply store. They’re now being used with increasing acceptance in other areas of retailing. Keepers are now manufactured with a “high end” look in mind.

A recent Loss Prevention Research Council study focused on the impact of Keeper use on health and beauty product theft. Their study showed lower shrink and higher sales in test stores that used Keepers. And there was a positive “return on investment” within just months.

There is no single solution that you can set and forget. In addition to CCTV, EAS and Keepers, there is a wide range of effective products and techniques that can help minimize loss and theft from your store.

Before you spend another cent on loss prevention think about your goal.

Contributed by Alan Herbach, who is President of American Theft Prevention Products, Inc. (www.AmericanTheftPrevention.com) which provides retailers with tools to effectively combat shoplifting. Alan can be reached by email at aherbach@AmTheft.com and can be followed on Twitter under the name AmTheft. You can also visit his professional blog at http://AmTheft.wordpress.com.

Protecting Yourself And Your Business 

The first thing to recognize is that if you have other people working for you and your business, it’s important that they understand what you expect from them in their email communication. By making your guidelines clear for all employees of your company, you can avoid possible problems, including potential liability issues and even lawsuits. While some of the below points may seem clear to you, it is beneficial to make your points known to all your employees.

1. Avoid any comments or language that are racist, sexist, defamatory, offensive or obscene. This includes forwarding anything that includes these details.

2. Keep your language gender neutral.

3. Do not use email to discuss confidential information, such as social security numbers or personal issues that have been identified as such.

4. Use disclaimers on all emails sent both internally and externally that highlight specifics to your company and protects you from possible problems due to unprofessional emails.

Becoming Efficient Through Your Choice Of Words

Time is of essence to everyone these days, so there is no point in wasting anyone’s time – particucarly in the busy world of retail. The goal should be to get to the point in your email communication. But in doing this, you should be polite and clear through your choice of words. A few tips on how to do this include:

1. Be direct and clear with a polite, respectful tone.

2. Answer any questions that have been directed to you with respect and direct questions you may have in a clear, professional matter. Often people get frustrated when they think their time is being wasted answering what they believe should already be known, so you want to avoid giving the impression of “frustration” or “annoyance” in your emails.

3. Use proper paragraph structures and professional layouts  for your reader to easily read through your email. Avoid one, long email that all blends together.

4. Do not write in all capital letters. This gives the impression you are screaming. In addition, do not write in all lower case letters. This gives the impression you are lazy.

5. Read and edit your email prior to hitting send. It’s amazing what reading it can often point out to you. Take the time to make necessary changes.

6. Avoid abbreviations even if you think they are obvious. What is obvious to you may not be to someone else.

7. Do not request delivery and read receipts. This takes time away from your audience since they likely have to approve this request. In addition, it’s often perceived as annoying and not necessary in most situations.

8. Don’t forget to include a concise, meaningful subject in your subject line. It should identify what the email is about without being too long in length.

Be Professional And Get Treated Professionally

Fingers get pointed whether we like it or not. He said, she  said is unfortunately part of most businesses, so make sure that what he or she is saying about you is not that you are unprofessional. A few additional points can help portray your business as the professional leaders you want to be.

1. Always respond quickly to emails. Don’t let emails sit in your in-box without at least a short, efficient and professional reply to the sender notifying them of when you can get back to them with additional emails. This puts your audience at peace for a bit and allows you to gain professional respect along the way.

2. Do not overuse the high priority option unless you truly, 110% believe your email is of high priority. Late shipments would fall into this category so a retailer could plan accordingly. However, letting your retailers know about a new product would not be considered high priority in regards to email notifications.

3. Don’t let your emotions get in the way of your professional words. Feeling pissed? That’s human. But think about how your emotions may come across in your choice of words in an email that can ultimately result in your business success – or failures.

4. Be careful who you copy (cc) and blind copy (bcc) on your emails. In addition, only hit “Reply All” when necessary and keep those not necessary in the email correspondence off the email thread.

Finally, enforcing an email policy for your business can help ensure professional communication and results. Identifying what is important to your business through a written policy is the best way to do this. Make sure to communicate these details to all necessary employees and have them sign an acknowledgement that they have read and understand it. By enforcing this, you protect yourself and your company. In addition, you gain respect from clients, customers, potential accounts and more! A better possible result? Increased sales! So make sure you are putting in place an email policy today!

If a $100 item is stolen from you, and you operate on a 25% margin, you need to sell $400 more just to make up for that one theft.   

So where’s your profit on that additional $400 sale?

But really, theft prevention provides an even greater financial benefit than it seems. Theft reduction adds directly to your profit. Stolen merchandise comes directly out of your bottom line.

Plus, it’s just plain frustrating to be robbed.

Don’t think that just because you have a small store, or your customers are “from the neighborhood” you are safe from shoplifters. Many shopkeepers tell stories of “regulars they thought they knew” stealing from them.

Don’t think that because your store is small, you can keep an eye on everything.  Check out YouTube, or your local police report. You’ll find plenty of examples of theft from small shops.  Are you cutting back on staff? What’s going on when you’re in the stockroom?  What’s going on when you are helping another customer?  Are you fully watching the store as you answer the phone or check a customer out?  The fact is that you can’t be watching everything all the time.

So what’s a small shopkeeper to do?

Here are a few tips that you can implement immediately.   

1. Provide Good Service.  Nothing is effective as having people around.  When you make it inconvenient for people to steal from you, they usually don’t. They are interested in your product, not getting caught. Welcome every customer as they enter your store.
2. Know Your Product and Pricing.  One common technique of thieves is to change price tags. If you don’t know every price by heart, at least have a sense of what pricing should be. When an item comes to the register that doesn’t seem right, double check.
3. Keep Your Store Orderly and Stocked.  This will help you notice missing items.
4. Have Appropriate Suspicion.  It’s not about ethnicity, age, hairstyle or economic condition. There are ample examples of upper class shoplifters. Watch how people are dressed. For example, an inappropriately heavy or baggy coat out of season may be a vehicle to hide items. Are they carrying a large bag? Watch where people go in your store. Do they tend to move from one hidden area to another?  How do they react when you talk to them?
5. Verify Returns.  One technique of thieves is to legitimately purchase an item, and then return an empty (or weighted) box. Verify all returns. Check receipts (you can use gift receipts). Make sure returned products are complete. If you use electronic security, re-tag returned merchandise.
6. Work With Your Colleagues.  When suspicious, be sure to alert your co-workers.
7. React Appropriately.  When you do suspect shoplifting, respond and react politely. Don’t accuse. Approach the customer to offer service. Politely talk to the person; offer customer assistance, ask to check their bag and “double check” your receipt.
8. Train Your Employees to provide good customer service and to identify suspicious customer activity. Theft prevention is not just a management responsibility. There are training videos available to help.
9. Know Your Police Department. Talk with local public safety and security professionals about general rules of thumb regarding the best way to react. Don’t risk personal safety or legal problems by reacting inappropriately.

As you can see, these tips focus on customer service. Understand the balance between good customer service and customer harassment. These techniques will provide you with happier customers, lower theft and higher profits. 

 Contributed by Alan Herbach, who is President of American Theft Prevention Products, Inc. (www.AmericanTheftPrevention.com) which provides retailers with tools to effectively combat shoplifting. Alan can be reached by email at aherbach@AmTheft.com and can be followed on Twitter under the name AmTheft.

Boutique stores often struggle with customers who want to return products weeks after a purchase. Because your inventory is not as deep as larger retailers, such as Macy’s, you typically cannot afford to accept returns too far after a purchase is made due to the fact that the product may no longer be on your selling floor as well as various other reasons.

In addition to controlling your inventory, you need to control your own checkbooks. If returns come in too far after originally purchased, your entire checkbook, so to speak, can get all messed up. We definitely don’t want to see you in a money hole due to returns!

Finally, the reality is that customers try and get away with everything these days. If you sell apparel or accessories, you may know this all to well. For those of you that don’t, here’s the scoop…. Customers sometimes buy things, wear them and then return them. Gross, right? Rude too. But none the less, it happens. Not all customers deserve this bad rap, but it’s because of these customers that we need to watch out for each other. So with these few points to consider, here are a few return policy tips:

1. Allow returns on all merchandise possible for up to a designated time frame. Typically, I reccomend 10 to 14 days maximum. People know within that time if they want to keep something or not, so offering more time just allows for them to push the limitations that you as  a retailer should consider (those mentioned above).

2. It’s okay to accept no returns on some purchases. On sale? Over a certain price? Personal item such as lingerie? Sometimes it’s okay to make a firm “sales final” statement. Make sure, however, that your customer is aware of this before their purchase. I suggest getting a stamp or other identifying factor to highlight this on the receipt and even having them initial your copy of the receipt and their own so that they confirm they understand your policy. A great site for stamps to help control all your retail needs, including a “Final Sale” stamp,  is www.rubberstamps.net.

3.  Identify your return policies in a visible place for your customers to see and review at their leisure. Dressing rooms and the check out areas are both great places to show these details. Double exposing these details is encouraged, too. In addition, when possible have your policy written out on your printed receipt.

4. Tags and other retail labels should be on the product for returns. In my opinion, there should be no exceptions here. You are not Target – meaning, you do not have oodles and oodles of inventory. Respect the inventory you do have and don’t accept returns on product that have the tags removed. No matter what the customer says, this indicates it was worn or used.

5. There are always exceptions. True to life, there will always be scenarios that deserve a little slack. But that is your call… not mine.  As boutique owners, part of the luxury of running your own show is that you can make these choices. Then again, that isn’t always a luxury since you can’t point fingers at anyone else. None the less, you call the shots. Just remember the shots called make all the difference.

Lastly, remember that every detail matters here. Make sure that a receipt is ALWAYS included with the return, as well. In addition, you should address all these details in a friendly, professional tone – it doesn’t need to be as if you are the return policy police. But do be clear so that your customers are clear. This will definitely save many headaches – both emotionally and financially – later for both you and your customers.