Retailers feel the squeeze of their generous return policies

Technology data tracking can clamp down on fraudulent abuse

Modern data monitoring has begun to allow retailers to crack down on perceived abuses of their item return policies.

“Returning things is an important element about retail businesses, as is how you handle returns can make or break you,” said Michael LeBlanc, senior retail advisor with the Retail Council of Canada.

“It’s an ongoing evolution and the pendulum for many retailers may be swinging too far in a generous direction for consumers at the expense of their bottom line. When you see people bringing back fake Christmas trees in January for a refund that is probably going too far.

“You can reach a point where it is not sustainable as a business to have a high level of returns.”

In the U.S. and Canada, retailers are hiring tech firms that specialize in tracking the in-store shopping habits of their customers.

One such company is The Retail Equation, based out of Irvine, Cal., which records and scores customers’ return activity, a service used by more than 34,000 stores across North America.

The company cites statistics that show stores lose $10.8 to $17.6 billion a year in the U.S. and $1.2 to $1.7 billion in Canada to fraudulent activity committed by customers.

In a recent profile in the Wall Street Journal, the company cited the example of a Best Buy customer in a California store who brought three cellphone cases back to the returns desk only to be told he would be barred from “making returns and exchanges” from that store for one year.

Consumer Protection BC says there is no law in B.C. that says a store must accept a return or provide a refund.

“Retailers are allowed to set their own refund/return policies,” said Amanda Parry, communications coordinator for the consumer protection branch.

Store retailers are walking a fine line, though, in trying to tighten return policies while online retailers are conditioning customers to expect lenient return policies, LeBlanc said.

He said that reflects the difference between the in-store “touch and feel” shopping experience for items as opposed to shopping on your phone or home computer.

“If you are buying clothes or shoes online, the tendency for many is to order multiple sizes because you don’t know exactly how they will fit. You keep the one that fits best and return the other items,” he said.

“What retailers are trying to do as an industry is really get a better handle on returns as that can really kill your business by virtue it drives up your cost of doing business, and ultimately everyone pays to off-set that cost. Nothing is for free. ”

LeBlanc says in many cases, once a product box is opened or used, it often either can’t be resold for hygiene or safety reasons, or is relegated to the B-channel discount store circuit. The retailer can be left holding the bag because product distributors generally won’t take unsaleable products back.

He said criminals have been aggressive in seeking out the weakest link in retailers’ return policies they can profit from, citing the example “porch pirates” who follow or monitor truck deliveries for online products, steal them after being delivered and seek to return the item for cash reimbursement.

“That is a part of doing business for online and retailers put up with that as best they can, but while there is a demand for that convenience the reality is 90 per cent of retail sales still come from people physically shopping in stores,” LeBlanc said.

“There is really an art and science for return policies for a given store. For loyal customers who spend a lot with your retail business which is now easier to keep track of, you might tend to be more loyal in return and part of that perhaps is having a little more forgiveness what they are buying and returning.”



barry.gerding@blackpress.ca

Like us on Facebook and follow us on Twitter

Just Posted

Demand for youth, child counselling spikes in Victoria

Oak Bay gala a crucial support for youth counselling

Organizer of Sidney election forum defend environmental focus

Organizers say the forum won’t be soap box for local MP and federal Green Party leader Elizabeth May

B.C. Lions hype-man marks 15 years of cheers

Crazy P cheers, chants, bangs his drum and spreads a message of love

Saanich Peninsula Hospital Foundation looks to grow funding for memory garden

Foundation will start new campaign next month as it wraps up recruitment campaign

Survey says 27% of Victoria employers look to hire this quarter

Another 13 % of employers anticipate cutbacks

VIDEO: A moment to remember during the World Lacrosse Men’s Indoor Championship in B.C.

Diego Hernandez Valenzuela’s team lost, but he felt like a winner Saturday

PHOTOS: Steller sea lion with plastic around neck rescued on Vancouver Island

Rescue staff determined the plastic band cut the protected animal’s neck approximately two inches

B.C. VIEWS: School officials join fact-free ‘climate strike’

Students, public get distorted picture of greenhouse gases

Handgun crackdown, health spending and transit plans latest campaign promises

Friday was the end of a busy week on the campaign trail

B.C. woman photographs massive ant swarm on Abbotsford driveway

She asked what the ants were doing? The answer: war

Iconic 90s TV show ‘Friends’ celebrates 25th anniversary

The iconic, decade-long television show aired its first episode 25 years ago today

Police arrest B.C. phone scammer linked to illegal call centres in India

Person arrested in Burnaby here on a work visa, says police

Air Canada forced girl, 12, to remove hijab: civil rights group

The San Francisco Bay Area office of the Council on American-Islamic Relations calling for change

Most Read