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

Tofino and Ucluelet’s Top 10 sports and arts stories of 2019

Revisiting the Coast’s best sports and arts newsmakers of the past year.

Rent-It Centre takes over curbside collection contract in Tofino and Ucluelet

Rent It Centre’s bid was $25,865 lower than the only other bidder, SonBird Refuse and Recycling.

Tofino’s first cannabis dispensary opens

“I don’t know where it’s going, but happy how it’s gone so far.”

Tofino welcomes much needed veterinarian to town

West Coast has not had a full-time vet since Dr. Jane Hunt surrendered her licence in 2004.

Looking back on the West Coast’s top 10 news stories

Tofino and Ucluelet’s top headlines of 2019.

‘Like an ATM’: World’s first biometric opioid-dispensing machine launches in B.C.

First-of-its-kind dispensing machine unveiled in the Downtown Eastside with hopes of curbing overdose deaths

Horgan cancels event in northern B.C. due to security concerns, says Fraser Lake mayor

The premier will still be visiting the city, but the location and day will not be made public

B.C. landlord sentenced to two years in jail for torching his own rental property

Wei Li was convicted of intentionally lighting his rental property on fire in October 2017

Blue Monday is a myth but seasonal affective disorder and the winter blues are real

Canadian Mental Health Association says weather can affect mood

PHOTOS: Eastern Newfoundland reeling, search underway for missing man after blizzard

More than 70 centimetres of new snow fell overnight, creating whiteout conditions

Prince Harry, Meghan to give up ‘royal highness’ titles

‘Harry, Meghan and Archie will always be much loved members of my family,’ says Queen Elizabeth II

Ice chunk from truck crushes vehicle windshield on Vancouver Island

None injured, but Nanaimo RCMP say there can be fines for accumulations of ice and snow

Calls for dialogue as Coastal GasLink pipeline polarizes some in northern B.C.

Coastal GasLink is building the 670-kilometre pipeline from British Columbia’s northeast to Kitimat on the coast

Wind and snow spark power outages across Vancouver Island

Winter storm warning in effect for east and west regions while wind warning to hit south and north

Most Read