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November 12, 2024
Should REI Be Banning Serial Returners?
REI recently confirmed that it was banning a small fraction of frequent returners from making any more exchanges or returns.
The outdoor retailer is known for its customer-friendly return policies, allowing returns for a replacement or refund within one year of the purchase date for co-op members or within 90 days for non-members.
REI said in a statement to ABC News that the new return policy exception impacts less than 0.02% of members who demonstrate a pattern of policy abuse, averaging a 79% return rate and $1,400 in used returns per year.
“We pride ourselves on having a generous returns policy,” REI said. “In the interest of preserving this benefit for as many of our members as possible, we recently updated our policy to provide an exception for members that have abused it in the past.”
The statement continued, “We’ve tried to curb this behavior by some members over the past several years with targeted warnings and probationary periods. Unfortunately, these tactics have not proven effective.”
Online shoppers facing bans first gained attention in 2018 when dozens of shoppers took to social media to complain about being cut off from Amazon, as reported by the Wall Street Journal.
A survey of 200 retail executives in the same year from retail software firm Brightpearl found that 61% of U.S. retailers and 45% of U.K. retailers would ban serial returners from shopping on their websites permanently.
The two kinds of serial returners have been defined as:
- Fitting roomers: Those purchasing multiple sizes, keeping what they like, and returning the rest.
- Wardrobers: Those who wear or use a product once and then return it.
Return fraud can also cause bans, with Target announcing earlier this year it was reserving the right to “refuse returns, refunds, and exchanges, including but not limited to prevent fraud, suspected fraud or abuse.”
Retailers have been tightening return policies in recent years to reduce the costs of returns. Beyond bans, steps being taken include charging for mailed returns while enabling free in-store drop-off, reserving free shipping on returns for loyalty members, and shortening return windows.
The risk of imposing bans is irritating profitable customers, as those making the most returns are often a retailer’s biggest spenders.
Retail Technology Show research from 2023 showed that just 6% (15% for Gen Z) of U.K. shoppers have been banned for excessive returns. Almost a third (32%) agreed retailers shouldn’t ban serial returners, 31% felt retailers shouldn’t ban serial returners if they kept some of their order, and 27% felt retailers should do more to understand why an item was being returned rather than enacting bans. The research further found that almost a quarter (23%) said that shoppers who returned the most were often the highest spenders.
Matt Bradley, event director for Retail Technology Show, commented: “Retailers are looking at ways to address the spiraling operational costs associated with returns on the one hand — and where the responsibility for paying for that lies. Yet, on the other, they are also having to weigh up the cost of potential lost conversions, Customer Lifetime Value (CLV) and loyalty from shoppers who have been conditioned to expect returns to be free.”
Discussion Questions
Do you see more upsides than downsides to REI’s move to ban alleged serial returners?
How can retailers preserve their relationships with banned shoppers who were conditioned to fitting rooming, free returns, or other generous return policies?
Poll
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Paula Rosenblum
Co-founder, RSR Research
Clay Parnell
President and Managing Partner
John Lietsch
CEO/Founder, Align Business Consulting
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REI offers a very generous returns policy. It is absolutely within its rights to restrict those who abuse it from making future returns. REI is not a public library; it is not there to sell products which people use and then return when they’re done with them. That is an abuse of the process, and it costs REI money and pushes up prices for everyone else. The only thing I would say is that REI could have given advance warning of this policy change and communicated it better to members.
You’ll see this commenter voting “yes”; there’ll be whining, it may attract attention – it already has – but tough @#$%; this isn’t “you break it, you buy it” parsimony, it’s culling the bad apples from the herd (mixed metaphors and all)
Mixed emotions. No one likes being taken advantage of, but these serial returners will probably make a lot of noise, and it’s likely a small number in total.
I probably wouldn’t bother if I was in REIs shoes
Yes, REI should be proactive in avoiding doing business with serial returners. It’s a small percentage of consumers, but it’s important to draw the line somewhere. And more than likely, the loyal and reasonable consumers, which are many with REI, will acknowledge and appreciate the fact that available inventory, customer service, and the overall shopping environment is not negatively impacted by the “devil” customers. Go REI, I’m cheering for you!
Nothing wrong with going after the serial “wardrobers” who casually open and wear items, only to return.
But “fitting roomers” deserve more policy thoughtfulness. There is such a thing as varied sizing discrepancies between clothing retailers with non-standardized industry patterns and silhouettes. Some customers land in a bad sizing spot – between two evils, so they need to buy both sizes and return poorly-fitted merchandise. And last, although a small population, there is such a thing as personal shoppers who buy merchandise for clients to see in person, and make a decision, with remaining items needing to be returned. Let’s not throw the baby out with the bath water on these customers.
A 79% return rate suggests they must be “between’ five sizes.
79% is significant for sure. Beyond correct sizing for someones body, its also actual fit and look – shoulders, arm length, torso, chest, and of course color once someone has it on at home. It would be good for REI they account for these customers and not just dismiss them.
The idea of asking “serial returners” or consistently “difficult” customers is not new. REI’s return policy is very liberal and hassle-free. Some customers abuse this generous policy, and the right way to handle this is to inform them and give them a chance to stop.
As the article points out, this impacts .02% of customers. Losing those customers, who cost REI money, will not impact their bottom line. It will enhance it.
I am on the fence here. Like Paula pointed out, if it’s not a lot of people, why bother? I do, however, think it is unfair to label and ban legit customers – the so-called “fitting roomers”. Sizing is all over the place. If you sell clothing online then you’d better be prepared for people to order multiple sizes and return the items that do not fit. Customers should not be punished because they are trying to find a perfect fit.
The customer is always right unless it’s the wrong customer. The problem with the wrong customer is that dealing with or offsetting the behavior of the wrong customers often ends up affecting the good customers.
Yes. Ban the repeat offenders but retailers must continue to innovate and find ways to address the issues posed by legitimate problems like inconsistent sizing (different than wardrobers). eCommerce, the great disruptor and terminator of physical commerce remains under 20% of total global retail sale which means that the final frontier of a seamless and profitable “phygital” world remains elusive (and full of opportunity).
When it comes to product returns, the customer is always right – except for a tiny few who should be fired.
Retailers with robust loyalty programs (and REI has a good one) can track the data to spot egregious actors and let them know that even generous policies have limits.
If they take these steps discreetly, there is always the risk that those shoppers will take to social media to complain. If they make a public announcement, they can expect criticism on social media – and quite possibly mainstream media too.
In my view, ordering several sizes and styles of hiking pants online and returning some unused after try-on (“fitting room” behavior) is not unreasonable shopper behavior. (Yes, there are some restocking costs, but that’s a cost of doing business and part of superior service.)
Returning a pair of hiking shoes after a 10-mile test (“wardrober” behavior) crosses the line however, as they are rendered un-sellable.
The alternative, as Paula and Georganne observe, is to just absorb the abuse because it comes from a tiny subset of customers. It’s worth crunching the numbers on this to make an empirical decision.
In the age of social media “life hack” and copy catting, REI is well within the rights to cut out the serial abusers. At the end of the day it is about having profitable customers and if the customer repeatly abuse the system, especially the “use and return” type, then the return ban is in order. Generous returns are good for the brand but when the minority abuses it and brag about it on social media, that customer needs to be fired.
The cost of returns of some of these customers probably wipe out any profits of the products that they actually keep. That should also be count into the equation
This serves everyone well, starting of course with REI. If you have the data, use it! As long as the decisions are based on facts and can be proven (they can) this is a great move. Further, in a small way it benefits members who do not game / rig the system by keeping it in place rather than killing it altogether.
Now let’s implement the common sense shoplifting laws that some states voted on and we are well on the way to lower costs in retail!
Now
REI’s move to ban serial returners makes sense—those abusing return policies drive up costs for everyone. Generous policies should be there for honest customers, not for those who treat stores like a rental service.
Retailers can maintain goodwill with these shoppers by offering clear guidelines on acceptable returns, emphasizing the importance of sustainable practices, and even offering paid memberships with exclusive perks.
But honestly, customers need to recognize that “free returns” isn’t a bottomless benefit, and if they can’t adapt, retailers will have no choice but to cut them off.
This move seems like a practical way for REI to protect its generous return policy for the majority of its members. With such a small group returning nearly 80% of their purchases, setting boundaries seems like a fair and necessary step to ensure the policy remains sustainable for everyone.