Retailers feel the squeeze of their generous return policies

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

Vandals burned a hole in the platform at the top of the Somenos Marsh Open Air Classroom early on the morning of Thursday, April 22. (Kevin Rothbauer/Citizen)
Arson closes Somenos Marsh viewing platform

Fletcher estimates the damage at more than $5,000.

Pharmacist Barbara Violo arranges empty vials of the Oxford-AstraZeneca COVID-19 vaccine that she has provided to customers at the Junction Chemist, an independent pharmacy in Toronto, Monday, April 19, 2021. Younger Canadians in several provinces are now able to get the AstraZeneca vaccine. THE CANADIAN PRESS/Nathan Denette
AstraZeneca vaccine appointments fill up fast on Vancouver Island

More pharmacies expected to be added as supply increases

A B.C. Centre for Disease Control map shows new COVID-19 cases by local health area for the week of April 11-17. (BCCDC image)
BCCDC says fresh COVID-19 cases down in most Island Health areas

Nanaimo sees its fewest new COVID-19 cases since mid January

More sleeping cabins for the homeless in the Cowichan Valley could soon be put in place if a $2.5-million grant application to the UBCM Strengthening Communities’ Services funding program is successful. (File photo)
Funding sought to expand homeless initiatives in Cowichan Valley

$2.5-million grant would see more sleeping cabins and outreach projects

The old Stanley Gordon school in Lake Cowichan. (Lexi Bainas/Gazette file)
Editorial: Old school properties represent potential for our areas

There are opportunities, often sitting right in the middle of our small communities.

Canadian Prime Minister Justin Trudeau and United States President Joe Biden smile as they say farewell following a virtual joint statement in Ottawa, Tuesday, February 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau pledges to cut emissions by 40% to 45% by 2030, short of U.S. goal

Trudeau announced target during a virtual climate summit convened by U.S. President Joe Biden

MLA Shirley Bond, right, answers questions during a press conference at Legislature in Victoria, B.C., on February 19, 2019. THE CANADIAN PRESS/Chad Hipolito
Former B.C. gaming minister says she wasn’t told directly about dirty cash flowing to casinos

Shirley Bond said Thursday civil forfeiture, gang violence and gambling addiction were also major concerns in 2011

RCMP Constable Etsell speaks to tourists leaving the area at a police roadblock on Westside Road south of Fintry, B.C., Thursday, July 23, 2009. THE CANADIAN PRESS/ Yvonne Berg
B.C. police say they take ‘exception’ to conducting roadblocks limiting travel

Asking the police to enforce roadblocks exposes officers to further risk and possible COVID-19 infections, says federation president Brian Sauve

As part of the province’s strategy to combat the opioid overdose crisis, take-home naloxone kits have been distributed throughout the province. (Courtesy of Gaëlle Nicolussi)
Vancouver Island could be at its worst point of overdose crises yet: medical health officer

Island Health issued overdose advisories for Victoria, various communities in the last two weeks

The conservation service confirmed they do not relocate cougars from settled areas but that euthanasia is not necessarily the fate for an animal in the Fanny Bay area. The hope is that the animal will move on to wild areas. (File photo)
Woman hopes cat-stalking Fanny Bay cougar can avoid euthanization

Conservation officers do not relocate the animals from Vancouver Island

Tofino residents expressed frustration over a recent post by Long Beach Lodge owner Tim Hackett that falsely claimed all residents have been vaccinated. (Westerly file photo)
Resort owner apologizes for suggesting Tofino is safe to travel to

Long Beach Lodge owner Tim Hackett apologizes to community and visitors

BC Hydro released a survey Thursday, April 22. It found that many British Columbians are unintentionally contributing to climate change with their yard maintenance choices. (Pixabay)
Spend a lot of time doing yard work? It might be contributing to climate change

Recent BC Hydro survey finds 60% of homeowners still use gas-powered lawnmowers and yard equipment

Journal de Montreal is seen in Montreal, on Thursday, April 22, 2021. The daily newspaper uses a file picture of Prime Minister Justin Trudeau dressed in traditional Indian clothing during his trip to India to illustrate a story on the Indian variant of the coronavirus. Paul Chiasson/The Canadian Press
Montreal newspaper blasted for front-page photo of Trudeau in India

Trudeau is wearing traditional Indian clothes and holding his hands together in prayer beside a caption that reads, ‘The Indian variant has arrived’

Police executed a search warrant at the Devils Army Clubhouse on Petersen road in Campbell River on August 10, 2017.
Murder trial: Victim left to conclude out-of-court settlement on the day he disappeared

Trial of Richard Alexander in death of John Dillon Brown continues in B.C. Supreme Court in Victoria

Most Read