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.”

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