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

Smudging in B.C. classroom had ‘trivial’ impact on Christian family’s faith, says school district’s lawyer

Lawyers lay out arguments in case regarding indigenous cultural practice in Port Alberni classroom

Nanaimo hunters may have harvested deer in area known for chronic wasting disease

Conservation officers make urgent request to public for any information

Nanaimo man caught with more than 200,000 child porn images to be sentenced

Crown says Aaron Macrae recorded video of children on buses and at his workplace

City of Nanaimo budget talks underway, projected tax increase up to 5.6 per cent

Series of special finance and audit meetings was held Wednesday at conference centre

One person injured in rollover crash on Nanaimo Parkway

Accident happened a little after noon in southbound lanes near Cedar Road

One person injured in rollover crash on Nanaimo Parkway

Accident happened a little after noon in southbound lanes near Cedar Road

Beefs & Bouquets, Nov. 21

To submit a beef or a bouquet to the Nanaimo News Bulletin, e-mail bulletinboard@nanaimobulletin.com

Canucks erupt with 5 power-play goals in win over Nashville

Vancouver ends three-game slide with 6-3 triumph over Predators

65-million-year-old triceratops makes its debut in Victoria

Dino Lab Inc. is excavating the fossilized remains of a 65-million-year-old dinosaur

Front Street becomes permanent location for bus exchange

Nanaimo city council will look at safety upgrades, will work with RDN on design

LETTER TO THE EDITOR: Time for a ban on leaf blowers

Loud noise can cause heart attacks, deafness and mental disorders, says letter writer

Nanaimo’s Kirkwood Academy presents 20th production of ‘The Nutcracker’

More than 150 dancers of all ages to participate in classic Christmas ballet Nov. 22-23

City of Nanaimo to issue alert as it moves to new emergency information system

Municipality will send out reminder Thursday, Nov. 21, asking residents to switch to new system

Most Read