Are you a serial returner? By that, I mean, do you routinely return items, especially holiday gifts? If so, be forewarned. Some retailers have resorted to using a computer database to track customer returns and catch fraudulent or excessive returns.
Return fraud, which includes bringing back used merchandise for a full refund, will cost retailers $3.5 billion this holiday season, according to a recent report by the National Retail Federation. For the year, the retail industry says it stands to lose $9.6 billion from fraudulent returns.
In its first survey that looked specifically at return fraud, the federation found that the most popular form of such fraud is the return of stolen merchandise. No surprise there.
However, retailers also complained about the use of bogus merchandise receipts. With a scanner and printer, people can copy and alter receipts, making it easy to return stolen goods.
They use the fake receipt (which they may have found in the trash near the store) to return an item so they can get cash for the shoplifted merchandise.
But more than half the companies polled reported a more old-fashioned scam. Here, a customer returns merchandise that has been used.
These returns involve everything from computers to digital video cameras to clothing. The industry calls this practice “wardrobing.” People just want to use the item for a special occasion – a graduation or wedding.
Most frequently, wardrobing involves female customers returning special-occasion dresses. A woman will wear the dress, tuck away the sales tag and then return the dress to the store for a full refund. That’s fraud.
In many cases, retailers cannot resell these goods, at least not for the full retail price.
Return fraud has become so prevalent that 25 percent of retailers in the federation survey said they will be getting tougher with their return policies this holiday season. One of the most common policy changes has resulted in “No receipt. No return.”
Some retailers are using the service of Irvine, Calif.-based The Return Exchange to monitor returns and catch thieves. The company provides fraud and abuse detection to track excessive or illegal merchandise returns.
Stores that use The Return Exchange will ask customers for a driver’s license or some other government-issued identification when he or she returns an item. The ID is used to track the customer’s returns. A return may be refused if the database detects possible fraud or the consumer has exceeded the store’s limit on returns. If you are denied a return because of a report from The Return Exchange, you can ask for a free “return activity report.” That’s a history of your return transactions, including the date and time you brought back an item, whether you had a receipt and the dollar amount of the return.
So how can you keep from having a return rejected?
Before you buy, check the store’s written return policy.
Don’t assume that a store’s Internet retail operation has the same return policy as its brick-and-mortar operation. Ask who pays the shipping costs in the case of an exchange or return.
Some merchants will pick up the delivery charges for exchanges, but not for returns.
Ask for a gift receipt. Only about 49 percent of people giving gifts during the holidays include a gift receipt, according to the federation.
Keep all your receipts. Many retailers still allow you to exchange merchandise without a receipt. However, without a receipt, the retailer may provide only a store credit for the lowest price the item has sold for in recent weeks. And please, if you don’t need your receipt, then destroy it to keep someone from fraudulently using it.
Keep all the original packaging, including all tags, rebate material and instruction manual. Some retailers won’t accept returns unless the item is in its original package. In addition, many stores now impose a restocking fee if an item has been opened. The fee can cost anywhere from 5 percent to 25 percent of the item’s price tag, according to Newgistics.
Despite tougher return policies, 89 percent of consumers still find stores’ policies fair. So, with the right information, you can have a happy return.
Contact Michelle Singletary at singletarym@washpost.com or c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071.
