By Tom Ryan
Abuses by a few have led to less liberal return policies for many shoppers this holiday season.
Fraudulent post-holiday returns are expected to top $3.7 billion this year, up from $3.5 billion in 2006, according to the NRF. As a result, many retailers are reinforcing or introducing new policies to reduce return fraud.
Among the preventive measures:
- This year, Costco tightened its return policies that had been open-ended for all but computers. It is now 90 days for TVs, computers, cameras and other electronics. The chain found that some consumers were continually returning older tech gadgets for newer models. Costco estimated that its no-questions-asked policy was responsible for losses of more than $100 million a year;
- A newer trend finds some retailers (Lowe's, Kmart, Wal-Mart, Barnes & Noble, etc.) using computer systems to monitor customers returns. If a customer brings back too many within a short period of time, the retailer might not accept them. Last year, for example, Express and The Limited for the first time explicitly disclosed return limits on the back of sales slips: five returns within any 90 day period with a receipt, or only up to $300 without a receipt;
- Sears, Roebuck and Co. maintains a broad 15 percent restocking fee, introduced in 2005 on select items including home appliances, electronics, and sporting goods not returned unused with full packaging. Best Buy and Circuit City have similar fees;
- JC Penney requires special occasion dresses to be returned with the "return tag" still in place. This thwarts shoppers from "wardrobing" for a one-time wearing;
- Target limits returns without receipts to just two per year, and only for items worth less than $20;
- Amazon.com will not accept returns of items that are missing the serial number or UPC square on the box.
However, many stores don't do much because they don't want to annoy the average customer looking to bring back product for legitimate reasons. Most stores gladly fix or replace a defective product. Some, such as Nordstrom, accept most items with few questions. Others have even loosened their policies this holiday. Best Buy normally demands returns within 30 days, but customers have until Jan. 31, 2008 to return things purchased from Nov. 1 to Dec. 24.
"Many retailers offer more lenient return policies during the holiday season to accommodate honest customers," Joseph LaRocca, NRF vice president of loss prevention, told The Denver Post. "But unfortunately, retailers must constantly balance the desire to take care of their customers with the undisputed fact that criminals are constantly looking to take advantage of return policies."
Discussion Questions: Should retailers in general be more or less restrictive in their return policies? What can retailers do to prevent "serial returners" from frustrating the return process for average customers?