Are stores relaxing return policies?

Here’s some potentially good news in the otherwise dismal economic climate. A new survey by the National Retail Federation concludes that many retailers will be adhering to more generous merchandise return policies this holiday season — extending the amount of time for returns to be made and being more flexible to customers without a receipt.

The survey suggests merchants aren’t necessarily acting out of the goodness of their hearts, but because they’re getting better at thwarting fraud; for instance, catching crooks who seek refunds for stolen merchandise with fake receipts or those who try to bring back used goods, like special occasion dresses, that they never intended to keep.

Fifty-two percent of the loss-prevention executives surveyed said their companies’ holiday return policies would be more lenient than the policies for the rest up the year. That’s up 35 percent from the percent who said so in 2007.

In addition, the number of retailers who said their holiday return policies would loosen compared to last holiday season tripled, from 3.4 percent of retailers to 11 percent.

That’s not to say all businesses are acting in the holiday spirit. Seventeen percent of survey respondents said their return policies actually would be tighter this season vs. last.

“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,” NRF Vice President of Loss Prevention Joe LaRocca said in a statement. “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 percent of sales, up from 7.3 percent a year ago. Experts expect that the $219 billion worth of goods will be returned to stores this year, with  $47.1 billion of those returns stemming from holiday sales.

Though retailers seem to be getting a grip on fraudulent returns, the practice is still rampant. Nearly 90 percent of those surveyed said they had stolen merchandise returned to stores within the past year. Return fraud will cost retailers an estimated $11.8 billion in 2008 and $3.54 billion during the holiday season alone. The good news is that return fraud is expected to decrease to 7.5 percent of holiday returns, down from 8.9 percent last year.

When is comes to fraudulent practices, one of the worst is the “wardrobing” — the return of non-defective, used merchandise — especially prevalent with apparel and electronics. Nearly two-thirds of retailers cited wardrobing as a problem.

Even though many chains intend to be less restrictive in enforcing return policies to the letter, don’t expect them to start posting signs to trumpet any change in policy. Retailers aren’t about to relinquish their right to review on a case-by-case-basis any return that clashes with the store’s written policy. 

While it’s probably too early in the shopping season to tell whether retailers are, in fact, being more or less rigid in accepting merchandise returns, we’d like members of the Tightwad Team to keep us posted. Let us know who’s being naughty and who’s being particularly nice. Write to us at tightwad at cro dot consumer dot org.

Related:

• Gift returns: New rules require new tactics
• Return roundup: The rules at 6 big retailers

Comments

[snakyjake]

What happens to the returned items? Are they sold at a discount, or resold as "new"? Do they go to an outlet store? Sent back to the manufacturer and refurbished?