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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.”