'Returnaholics' cost retailers billions of dollars a year
Filed under: Shopping, Fraud, Consumer Ally, Economizer
If you've noticed that returning items to stores isn't as easy as it used to be, rest assured: It isn't just you. Thanks to a growing number of people who are returning items they've used or never bought in the first place, retailers have been employing a variety of new techniques to stop so-called "returnaholics" and others from abusing the return process.Last year, return fraud cost the retail industry an estimated $10 billion to $15 billion, according to the National Retail Federation. In fact, return fraud has become such a problem that it has sparked an industry-wide crackdown. Stores are using databases to identify serial returners.
"This kind of behavior escalates during economic downturns, when people don't have the cash to buy the things they want," said Mike Kraus, a retail expert for Allbusiness and CEO of the consultancy StoreTouch.
Being a "returnaholic" isn't so much a psychological issue as a financial one. Kraus said most people aren't serial returners because they like buying and returning items, but rather because they want to make a buck.
| Yes, and I feel terrible about it. | |
|---|---|
| Yes, and what's wrong with that? | |
| No, that's wrong. |
One of the most widely-known schemes entails something that retailers call "wardrobing," which describes the act of purchasing clothes, wearing them and then returning them. Apparel (particularly special occasion clothes), electronics and tools are among the most commonly returned items after they've been used. Take, for example, a homeowner who needs a drill for one project, but doesn't want to shell out the cash to own a drill. They purchase the drill, leave the tags on, use it and bring it back when they're done.
Some returnaholics are even more bold. "One of our customers just identified a woman who was hitting them every single day," says Derek Rodner, a loss control expert and vice president of Agilence Inc., which sells software to help retailers identify repeat offenders and problem returners. "This woman would simply walk into the store, make note of the store manager's name from the sign at the customer service desk or hanging near the front of the store, go into the aisles and pick up several items and go right to the customer service desk and return them without a receipt. She would simply say that she called (using the name of the store manager) and he told her to bring the items back. This woman was hitting 27 of their 133 stores, two a day, and then she would repeat. She admitted to over $10,000 in return theft over the course of 90 days."
Even legitimate returns can cost a store. The store eats the original transaction fee if the purchase was made by credit card, for example. But it's those steal by returning an item for a refund or credit who are the biggest threat. "This is why many retailers have implemented complex software tools that monitor these returns and may eventually limit a customer from returning more items," Rodner said.
And some measures are less high-tech. To well defend against "wardrobing" some stores have started putting the tags in prominent places in the front of garments so they can't be easily tucked away. And, they require that clothes brought for return must still have the tags.
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Reader Comments (Page 1 of 23)
5-18-2010 @ 2:03PM
sheshallbepraised said...
I like the phrase "return theft". Most people dont think of it like that, but that is exactly what it is.
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Reply
5-20-2010 @ 12:29AM
Carolyn said...
To me, "Return theft" in the article specifically referred to people stealing things off the shelves and returning them for credit. In other words, they never bought the items in the first place. Is this your take on it?
5-25-2010 @ 6:07AM
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5-25-2010 @ 6:06AM
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5-25-2010 @ 9:42AM
BTDT said...
Rather disturbing that 8.7% of the respondants think there is nothing with this.
5-25-2010 @ 9:47AM
r bearfield said...
they are the ones that do it. low life scumbag thieves.
of course calling them what they are doesn't bother them.
5-25-2010 @ 1:06PM
Jamie said...
We bought a countertop icemaker from Target and it did not work properly. The manufacturer, wanted us to send it to them before they would even send a replacement. Why should I pay for that or wait for a new one. So, we took it back to Target. It was used, but it had to be to know that it was the worst purchase we ever made! It was $100+ of pure garbage and since they sold it they should have to take it back used or not! They replaced it even though we wanted our money back. They wouldn't give us a refund because it was over $50. We were forced into having a nother crappy icemaker from the same terrible manufacturer all because of the new store policies that are due to this return theft! They also told us if the 2nd one didn't work we would have to deal with the manufacturer because we couldn't return it a 2nd time regardless of the fact that they sold it to us, and continue to sell the item in all of their stores. Needless to say, we never even opened the second one. We sold it and bought a better machine, but we had to take a loss! These rules are totally unfair to the honest shopper and they should make some adjustments to the rules for that!
5-18-2010 @ 10:54AM
JP said...
I can see this being a real problem. On the other hand, I feel that in recent years I have been buying items that have lower quality than the price I pay. For example, I bought a nice blender and parts became rusty within a few months even with proper care. I make my returns because I expect a certain level of quality for the price I pay. Sadly, stores and manufacturers do not provide goods that meet or exceed past standards. Why is that?
Reply
5-18-2010 @ 2:56PM
Pam said...
JP,
It's called "planned obsolescence." The stores realized that back when quality goods were sold, such as kitchen appliances that lasted 30 years or so, they would only sell a customer one or two refrigerators in that person's lifetime. But, by manufacturing goods of cheaper quality that are specifically designed to break down or stop running after several years time, they could sell that product over and over to people over the course of a lifetime. Smart marketing tactic -- tough luck for the consumer! Sadly, it's just the way of the world these days . . .
5-18-2010 @ 3:16PM
Tom said...
Made in China!
5-25-2010 @ 7:14AM
dave said...
Because most of the shoddily made products come from China, and other outsourced manufacturing. The owners and CEO's could care less about quality, just as long as they can make 6 figures, while the few Americans left in manufacturing are lucky to make 28000 a year, then pay 400 a month for lousy health insurance. Look at all the harmful products we get from China...tainted heparin, dog food, baby food, toys...on and on. Then, because so many people's jobs have been outsourced, the rare occassion they do buy something, its from China, because its cheap, and they are laid off, adding to the rapid downward spiraling of America.
5-25-2010 @ 2:15PM
rachel said...
Look at the country it was manufactured in - that will answer your question
5-25-2010 @ 8:07AM
Margie said...
I think it's because we all want the best quality on everything but we don't want to pay a higher price for it. So we get mediocre quality. Second, we all want to be paid top dollar. Very few will knock themselves out to do a great job and have no work ethics. Companies do not want to pay workers any more than they have to even the really good ones. Most businesses expect fewer people to do the same work load. Lastly...too many people have no pride these days! No sense of right or wrong. It is just what ever makes them happy and to hell with everyone else.
5-25-2010 @ 8:17AM
jenesis227 said...
It's because of the outsourcing. Products aren't made here in the US much anymore. Thus, cheaper materials. And if you think those extended warranties do any good, the answer is 'no'. Another waste of one's money. When manufacturing is brought back to the US, that's when the quality of things will improve. There are plenty of people in need of jobs here in the US these days. If you're going to waste money on low-quality products, might as well purchase them at WalMart and K-Mart, and the many dollar stores around. The term 'you get what you pay for' doesn't apply anymore here.
5-25-2010 @ 8:22AM
bettya said...
It's an ugly practice, but I have little sympathy for the big retailers. If they want to curtail this 'buy and return' rental business, then they should go back to CASH only business.
I remember working in retail back in the eighties; credit cards were rare! We used to be impressed by anyone who paid with one, especially a 'platinum' or 'silver' store card. Now, everyone has not just one credit card but several. It's easy to carelessly rack up purchases. Go back to cash only, and you will see a very different consumer style. But stores won't do this, because they are GREEDY.
5-25-2010 @ 8:48AM
roger said...
Because consumers are so price driven,,, look at wal mart ads,, they dont even advertise things,,, just a price,, is because you dont care about anything but price,,, so the experts say.
The consequences? Junk!
5-25-2010 @ 8:53AM
B said...
I agree JP. While I would never return a product for profit. I am not going to eat the cost of an inferior product.
It is just as wrong for the store to cheat me, as it is for me to cheat the store. I won't let either happen!
5-25-2010 @ 9:02AM
gigi said...
Pam is absolutely correct. I was just thinking the same thing the other day when I pulled out the two year old chopper/mixer I hardly ever used to find the motor was dead, and had to continue using the Hamilton Beach blender that I've had and used frequently for over 20 years! As the saying goes, "they just don't make 'em like that anymore!"
5-25-2010 @ 9:39AM
joeomar said...
Actually, it's because the American public is too cheap to buy quality goods, so the manufacturers make cheap junk. If Wallie-world sells a $19.99 can opener made of quality materials that'll last a lifetime and puts it on the shelf next to a $6.99 piece of stamped tin that'll fall apart in six months, the piece of junk will fly off the shelf and the $19.99 will gather dust. Manfacturers can't sell the quality goods so they respond with more cheap junk. That's capitalism at work.
5-25-2010 @ 10:11AM
Suzanna said...
Well said. I've found that to be extremely true too, especially at Wal*Mart!!