Dealing With Returns That Are Used
Retailers are well aware that there are consumers who feel it’s just fine to “borrow” items. Use them and return them. It might be a formal dress for an important wedding, shoes for a job interview, a large screen TV for the big game, or a ladder for the occasional around the house job.
“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
Emily Rubin Persons
Further to your article and an additional problem for the retailers in my product category are the customers who poorly handle product and then return it expecting a brand new item – sometimes more than 6 months after purchase! It is hard to tell a customer that it is obvious they didn’t follow the care instructions. But this puts a great cost burden on the vendor.