New Return Policy Has Consumer Group Concerned

Sep 30, 2004

By George Anderson

The Privacy Rights Clearinghouse (PRC), a consumer advocacy group in San Diego, Cal., is concerned about the number of complaints it has been receiving from consumers who say stores have refused to give them an refund and/or exchange for returned items.

Jordana Beebe, a spokesperson for the PRC said there are no set rules for determining when a consumer has gone overboard with returns or that retailers are even keeping tabs on who returns merchandise.

They “don’t know when they make a return or exchange that there’s some sort of demerit that’s put against their name and may come back to bite them in the future,” she said.

A number of retailers, reports CBS MarketWatch, have begun using The Return Exchange, also based in San Diego, to track consumers returning items to stores.

When a consumer returns an item, the store requires them to provide their driver’s license or state ID. The identification is swiped through a device and the consumer’s information is sent to The Return Exchange’s host server where the return will be approved or declined. The company’s Web site says the system detects “fraud through utilization of deterministic rules, statistical models and a shared return information database.”

King Rogers, chief executive of KingRogers International, an assets-protection consulting firm told CBS MarketWatch that while most consumers are ethical, those who abuse the system are costing retailer’s and ultimately, other consumers, money.

These consumers, says Mr. Rogers, fall into two primary groups: Those who wear clothing or use a product for personal purposes and then return it and thieves who falsify receipts to make a profit out of returning items.

Moderator’s Comment: How can retailers reduce the amount of product returned from unscrupulous people without turning off the vast majority of honest

King Rogers takes a hard line suggesting retailers do not even have to accept returns if they do not wish.

“Is there a law out there that says that a retailer has to take an item back? I don’t think so. This is a customer service, decided years ago by retailers
to differentiate themselves perhaps from the competition. But over time it seems this small group of people began to take more and more undue advantage of that retailer offering.”

Mr. Rogers may be right on this point. We don’t know, for sure. Of course, we also don’t know of any retailer that would remain in business for long if
they didn’t accept returns.

George Anderson – Moderator

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