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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Free pads, tampons now available in Surrey school washrooms

Menstrual products previously given out to students upon request

Surrey student selected as Loran Award recipient

Award is valued at $100K over four years of undergraduate studies

‘Coldest Night’ walk in Whalley aims to raise $25K on Saturday

Live music, food and commemorative toques attract teams to national event held annually

Former Cloverdale church elder pleads guilty to sexual assault

Brian Batke, 73, entered guilty plea Feb. 14

Pipeline dispute: Tories put no-confidence motion on House of Commons agenda

Conservatives say they have no confidence in the Trudeau government to end the rail blockades

Galchenyuk nets shootout winner as Wild edge Canucks 4-3

Vancouver tied with Calgary for second spot in NHL’s Pacific Division

B.C.’s soda drink tax will help kids lose weight, improve health, says doctor

Dr. Tom Warshawski says studies show sugary drinks contribute to obesity

A&W employees in Ladysmith get all-inclusive vacation for 10 years of service

Kelly Frenchy, Katherine Aleck, and Muriel Jack are headed on all-expenses-paid vacations

B.C. mom’s complaint about ‘R word’ in children’s ministry email sparks review

In 2020, the ‘R’ word shouldn’t be used, Sue Robins says

B.C., federal ministers plead for meeting Wet’suwet’en dissidents

Scott Fraser, Carolyn Bennett says they can be in Smithers Thursday

UPDATE: TransLink gets injunction ahead of pipeline, Indigenous rights protest

The protest rally is in opposition to the Coastal GasLink and Trans Mountain pipeline projects

Province shows no interest in proposed highway between Alberta and B.C.

Province says it will instead focus on expanding the Kicking Horse Canyon to four lanes

Mysterious bang booms over Sumas Mountain once again

Police unsure of source, quarry companies say, ‘not us’

Most Read