Business Opportunities Weblog

Are You A ‘Returnaholic’?

By on May 20, 2010 in Ideas

According to WalletPop, if you’ve noticed that returning items to stores isn’t as easy as it used to be, rest assured: It isn’t just you.

Thanks to a growing number of people who are returning items they’ve used or never bought in the first place, retailers have been employing a variety of new techniques to stop so-called “returnaholics” and others from abusing the return process.

Last year, return fraud cost the retail industry an estimated $10 billion to $15 billion, according to the National Retail Federation. In fact, return fraud has become such a problem that it has sparked an industry-wide crackdown. Stores are using databases to identify serial returners.

One of the most widely-known schemes entails something that retailers call “wardrobing,” which describes the act of purchasing clothes, wearing them and then returning them.

Apparel (particularly special occasion clothes), electronics and tools are among the most commonly returned items after they’ve been used.

Take, for example, a homeowner who needs a drill for one project, but doesn’t want to shell out the cash to own a drill. They purchase the drill, leave the tags on, use it and bring it back when they’re done.

Photo by Gimages.

customers returns sales

Rich Whittle has added 6,226 posts to Business Opportunities Weblog.

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  • http://wahm.business-opportunities.biz Angela Shupe

    That reminds me of a story I heard back in middle/high school. A teacher of ours was telling us about a friend of hers that worked at a local store (I believe it was Felpaush). One day a woman came in with a bottle of hairspray and tells the lady at the return counter, “It just doesn’t work. When I push the button nothing comes out.” Well the lady points out that she used all the hairspray. The customer insists that she wants to return it for another bottle. Because of their policy at the time (I don’t know if it is still that way now) the customer is considered right and she was able to get a new bottle of the same exact hairspray for free.

    I don’t understand what drives people to commit a form of fraud like that but I’m glad I’m not desperate enough to be one. I’d much rather do my part and pay for what I use.

  • Alex

    One of the great things about the U.S. and I believe one of the main reason why this economy is dynamic is the generous return policy that is offered here and practically nowhere else in the world. Here are some benefits that I see:

    1. “I can always return it if I don’t like it” – I don’t know how many times I’ve purchased something because I was willing to give it a chance and ended up keeping it. When I’m overseas, say Asia or Europe, I really hesitate to buy anything new and expensive. For example, I bought a $300 Roomba vacuum cleaner at Costco because I knew if it sucked, I can return it. As it turns out, it’s great, and I love it! However, if I were in China where it’s buyer beware, even if the item was broken out of the box, I would’ve never purchased it.

    2. product quality is better – poor products that can’t be returned will allow the manufacturers to keep on selling them since there’s no risk once the product has been sold. I have purchased many things from discount stores like Walmart and dollar stores where the quality was just crap, so I returned them and bought a competitor’s product. You can be assured that after a few hundred returns, the store will either stop selling it or the manufacturer will improve the product, since they can’t afford to eat the cost of the returns.

    3. good customer service promotes loyalty – I believe this is one of the main reasons why Costco is so successful. Sure they ofter bulk packages which on average is cheaper, but they also sell large luxury items like TV, jewelry, furniture, etc. that aren’t necessarily cheaper than elsewhere. But I buy them from Costco anyway… why? because I know Costco will always be reasonable and if for whatever reason I don’t like it, I’ll get my money back. I’ve been paying Costco’s $60 membership for more than 10 years and their generous return policy is one of the main reasons why I’ve shelled out more than $600 over the years.

    Focusing on the short-term money savings, in my opinion, is wrong of retailers. I shudder at the thought where buying anything new is a gamble. It will discourage me from spending my money. Why on earth would any retailer want that?

    Alex

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