By Bob Livingston
If you’re in the habit of routinely returning merchandise to retailers (wrong size connector for your stereo, pants don’t fit as well as you expected, found a better product for the purpose, etc.), you may be on the radar of some retailers who hire third party companies to track your returns, possibly leading to your returns being refused. Be aware of return policies, which vary from retailer to retailer, and what is expected of you to make legitimate returns.
Retail fraud is a big problem for retailers. In a survey last year by the National Retail Federation, retailers estimated that about 11 percent of all sales are returned, and out of those returns, about 11 percent are believed to be fraudulent.
Now, we’re not talking about returning that gaudy tie somebody gave you for Christmas or a shirt that didn’t fit because the giver didn’t know your size. And we’re not talking about gadgets that don’t work as expected (or don’t work at all). We’re talking about people who return worn or used merchandise, or return things excessively and often, or return goods that were actually stolen in order to get a cash refund, or for other suspicious reasons.
There are also people, women especially, who use retailers as a kind of out-of-home wardrobe carousel, buying a new dress or jewelry item for a party, wearing it once, then returning it for a full refund. There’s even a name for it — “wardrobing.”
One survey discovered that one in six women admit to it, and the practice has even become fashionable. “I don’t like to be photographed in the same outfit twice, or even three times,” posted a lady in London on an online forum.
Guys do it, too, though not so much with clothing as with widgets. A fellow working on a project needs a particular wrench but isn’t sure what size to get, so he buys four different sizes and then later returns the three that don’t fit.
For the retailers — and ultimately for us consumers — return abuse and fraud is costly. A 2014 survey by the National Retail Federation estimated the cost of return fraud to be about $10.9 billion for the year. That cost gets passed on to consumers in higher prices.
Some retailers are taking steps to curb return abuses by engaging the services of a California company that tracks customer returns and red flags those that appear to be fraudulent, denying the return and placing the alleged offender on a blacklist to refuse future returns from that person.
The tracking company, The Retail Equation based in Irvine, California, develops “risk scores” based on customer behavior and identifies “suspicious” returns based on each retailer’s criteria. The Retail Equation website’s FAQ page says it employs a technology called Verify® Return Authorization, which uses statistical modeling and analytics to detect fraudulent and abusive behavior when returns are processed at retailers’ return counters.
The company claims its services are deployed in 34,000 retail stores, including such well-known retailers as Best Buy, Home Depot, J.C. Penney, Sephora and Victoria’s Secret.
The company says the behaviors of 99 percent of customers are OK; its service is targeted at the 1 percent of “returnaholics” whose behaviors “mimic fraud or abuse or exhibit habits that are inconsistent with the retailer’s return policy.”
The return policies and tolerance thresholds for returns vary greatly from retailer to retailer, but some of the most common reasons for triggering a ban on returns for a consumer are these:
- Returning a large percentage of your total purchases
- Returning a high dollar amount
- Returning an item without a receipt
- Returning an item after a certain period
- Returning items that tend to get stolen at the retailer
- Returning too many items in a short period
- Returning an item just when a store closes
According to The Retail Equation, their return authorization software does not take into account age, gender, race, nationality, physical characteristics or marital status.
The system doesn’t always work as intended. Sometimes innocent customers get flagged as abusers, and it is reportedly difficult to get a ban lifted. Best Buy has established a dedicated hotline for customers who think they have been wrongfully banned from making returns.
Some retailers are taking other steps to combat return abuse, including requiring a driver’s license or photo ID to make a return and refusing returns without a receipt. And if you damage the goods, chances are you won’t get a refund.
A number of retailers, like Bloomingdale’s, now attach three-inch black tags to visible places on clothing, like the front bottom hemline. The tags are unhidable and once removed, they cannot be reattached. Unless the black tags gain stature as a chic fashion statement, women will be reluctant to wear the tagged clothes once and return them.
Some retailers are fairly lenient on return policies, even some offering a no-questions-asked policy. Nerdwallet blogger Joe Kukura identified several well-known retailers with generous return policies:
- High-end retailer Nordstrom is famed for its easy return policy with no time limit and no receipt required.
- Kohl’s has what it calls “Hassle-Free Returns” in most cases with no time limit and no receipt required.
- Outdoor and fitness retailer REI proclaims a “100% Satisfaction Guaranteed” return policy for replacement or refund within a year of purchase, even if it has been worn, as long as it has been cleaned or laundered. They do, however, require a receipt.
- Bed Bath & Beyond allows returns of merchandise purchased at one store to be returned at any other of its stores, with no time limit if you have a receipt, or one year without a receipt.
- L.L. Bean requires no receipt, but without one, credit is usually given as a store gift card, not cash. With a receipt, the refund is reimbursed with the original form of payment.
- J.C. Penney offers full returns with no time limit in most states (with exceptions on some items). With a receipt, the refund is in the original payment form; without one, you get a voucher for the lowest price on that item in the last 45 days. There are some restrictions on returns of furniture, fine jewelry, appliances, small electronics and other categories.
- Walmart only accepts returns within 90 days of purchase, but no receipt is required for returns in a store. Without a receipt, you’ll get an even exchange, a cash refund or a Walmart gift card, depending on the amount of the purchase. There are some restrictions on groceries and home goods.
Return policies can change from time to time, so double-check before you buy if you have any thoughts you might be bringing an item back. Requirements for prominently posting return policies in the store very greatly different from state to state. But most major retailers will have signs posted near the checkout counter or at the customer service/returns counter and sometimes throughout the store. In many cases, the return policy is printed on the receipt. Be sure you know and understand the return policy before you buy.
You should also be aware that in many cases, especially with electronic/digital merchandise, retailers may assess a restocking fee on returns that could amount to as much as 15-20 percent of the original purchase price. That means you won’t get back all you paid for the item.
To minimize the chance of any hassles with returns, be sure to keep all receipts for your purchases, maybe in an alphabetized folder. With packaged goods, be sure to keep all packaging materials, instruction manuals, accessories, etc., to include in the return (some places will not accept incomplete returns).
As a general rule, retailers try to be as accommodating of returns as they can, but by using a little common sense and avoiding known “red flag” behaviors, you should be able to shop with confidence that if for some reason your purchase is not entirely to your satisfaction, the retailer will set it right for you.