As retailers get a handle
on return fraud, many are softening return policies this holiday season
as a way to provide good customer service. According to the National
Retail Federation’s third annual Return Fraud Survey, completed by 82
retail loss prevention executives last month, more than half of
retailers (52%) say their holiday return policies will be more lenient
than the policy for the rest of the year, up from 35 percent who said
so in 2007.
In addition, the number of retailers who said their holiday return
policy will loosen compared to last holiday season will triple, from
3.4 per cent of retailers to 11.0 per cent. Common changes may include
retailers extending the amount of time for returns to be made and also
being more flexible to customers without a receipt. In comparison, 17.1
per cent of retailers said their return policy will tighten this
holiday season, up slightly from 15.3 per cent last year. In addition,
71.9 per cent of retailers’ policies will remain the same.
“In a year where practicality is paramount, many retailers are making
return policies more flexible for customers who need to bring back
duplicate or unwanted gifts after the holidays,” said NRF Vice
President of Loss Prevention Joe LaRocca. “Retailers seem to be finding
a balance between providing good customer service to shoppers while
preventing criminals from taking advantage of lenient policies.”
The survey also provided more evidence of a weak economy, as retailers
said that returns as a percentage of sales are on the rise. This year,
return rates are estimated to reach 8.7 per cent of sales, up from 7.3
per cent one year ago. The amount of merchandise returned to stores
this year is estimated to reach $219.1 billion, with $47.1 billion of
those returns coming from holiday purchases.
“Consumers experiencing a bit of buyer’s remorse as a result of the
economy may be returning unworn and unused merchandise to stores,” said
NRF Vice President of Loss Prevention Joe LaRocca. “While retailers
look at returns as a way to provide good customer service, an increased
rate of returns is yet another challenge for retailers during a tough
economic climate.”
Retailers know the decision to make return policies more lenient may
come at a cost. According to the survey, return fraud continues to
plague the industry and will cost retailers an estimated $3.54 billion
this holiday season, down slightly from $3.6 billion last year.
(Retailers will lose $11.8 billion to return fraud in 2008.) However,
retailers seem to be tackling the problem, as return fraud is expected
to decrease to 7.5 per cent of holiday returns from 8.9 per cent last
year.
Though retailers seem to be confronting return fraud, incidents
continue to permeate through most retail stores. According to the
survey, most retailers (88.9%) have had stolen merchandise returned to
stores within the past year. Retailers also report being victimized by
returns of merchandise originally purchased with fraudulent or stolen
tender (74.1%) and returns using counterfeit receipts (45.7%).
The unethical practice of “wardrobing,” the return of non-defective,
used merchandise—especially in the apparel and electronics
categories—continues to be problematic for retailers. Nearly two-thirds
of retailers (64.2%) have seen this type of merchandise returned in the
past year – down from 66.1 per cent last year, but up from 2006 levels
(56.0%).
|
