Customer Fraud Comes in Many Forms: “Wardrobing” Is One of Them

Retailers are well aware that shoplifting and employee theft cost them billions of dollars a year in lost revenues just in the United States and well over $125 billion worldwide. But, the phenomenon of excessive customer returns seems to be growing, and that also affects the bottom line. And this problem has not receive enough attention — until now.
Consider these observations by Cotten Timberlake, Renee Dudley, and Chris Burritt, writing for Businessweek:
“Many merchants have long lived by the mantra that the customer is always right, adopting liberal return policies in hopes of winning the loyalty of free-spending shoppers. But with a recent increase in the wearing and subsequent return of expensive clothes — a practice merchants call wardrobing — many retailers are taking a stronger stand against the industry’s $8.8 billion-a-year return fraud problem. Bloomingdale’s, in February, started placing 3-inch black plastic tags in highly visible places, such as the front bottom hemline, on dresses costing more than $150 as they are being purchased. The clothes can be tried on at home without disturbing the special tag. But once a customer snaps it off to wear in public, the garment can’t be returned. Some electronics retailers have also turned to hefty restocking fees to discourage short-term use of expensive electronics to watch events such as the Super Bowl.  And high-end outdoor goods retailer REI recently announced it’s ending its lifetime return policy after customers took advantage of its lenient rules.”
Click the image to read more.

 

 

This entry was posted in Part 3: Targeting Customers and Gathering Information, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer and tagged , , , , , , , , , . Bookmark the permalink.

4 Responses to Customer Fraud Comes in Many Forms: “Wardrobing” Is One of Them

  1. Jeff Zelaya says:

    Having a lifetime return policy is a recipe for disaster. It’s nice to hear that as a consumer but as a business owner I don’t think it’s feasible. Besides REI is there anyone else out there that does something similar?

  2. Pingback: Holiday Return Fraud Is Billions of Dollars | Retailing: From A to Z by Joel Evans

  3. Pingback: The 25 Most Popular Posts by Retailing: From A to Z by Joel Evans | Retailing: From A to Z by Joel Evans

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