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Why Are Store Return Policies So Strict?

Taking Aunt Ida’s gifts (all those flannel pj’s!) back to the store isn’t as easy as it used to be. Learn why—and what you can do to ensure at least a few happy returns.

By Ashley Tate
Illo: man trying to return merchandise at storePapercut.fr

’Tis the season of passed-on presents, when visions of store credit dance in your head. But don’t be surprised if it’s harder to get that refund this year. According to Jeff Green, a Phoenix-based retail consultant, shoppers are getting pinched by newly tightened return policies. Why? Some stores have altered their rules in response to a growing crime: return fraud. That’s when people make illicit merchandise returns in order to get cash refunds or store credits that they aren’t entitled to (say, by reusing old receipts or returning stolen goods). In recent years, refund fraud has totaled about $8.8 billion annually, according to a survey by the National Retail Federation (NRF), an industry organization. This is bad news not only for merchants but also for honest customers, as the cost can be passed along in the form of higher prices, says Garth Gasse, the director of asset protection for the Retail Industry Leaders Association, a trade group.

The ways that return policies have changed vary from store to store, but there are a few trends. For instance, popular retailers like Best Buy and REI have reduced the refund window (the number of days that a customer has to return something). Also, at some stores, “there is no longer a one-size-fits-all policy,” says Edgar Dworsky, the founder of ConsumerWorld.org, a consumer-resource site. “The rules for the return depend on exactly what you bought.” A big-box store might accept returns on home goods, like throw pillows, for 180 days but allow only 15 days to return a TV. Why the discrepancy? “With electronics, new models continually hit the shelves, and older models become obsolete,” says Green.

You may also hit a roadblock if you attempt to return items of clothing from which you’ve removed the tags. The reason: It could look as if you’re trying to commit one of the most common return scams, known as “wardrobing.” This abuse occurs when a consumer buys something, wears it, and then returns it for a full refund. “When someone commits wardrobing, the garment may not be resold if it has clearly been worn—if, say, it’s stretched out,” says Gasse. “So the store loses money.” According to the NRF, instances of this con are rampant. More than 60 percent of merchants reported cases of wardrobing in the past year. Some retailers are fighting back by adding special tags to garments. These tags are placed in a prominent exterior spot, such as the neckline, so you can’t wear the item without removing the tag, says Green. Once the tag is removed, you cannot return the item.

That’s not all retailers are doing to cut down on fraud. Some are electronically tracking returns. “A clerk collects data from your driver’s license, along with information about your return,” says Dworsky. “If you exceed the number of returns that the store allows in a particular time period, your return will be rejected.” What’s the magic number? Dworsky says that no retailer will release that information to the public.

So what can you do? Keep receipts and ask for gift receipts. Read and understand the return policies of your favorite stores. (The policy is often posted at the register.) If you’re prone to procrastinating on returns or losing receipts, sign up for e-mail receipts, or try to patronize retailers with ultra-generous return policies. (Lands’ End and Eddie Bauer, for example, accept any item at any time.) That’s advice that comes with a money-back guarantee.

Read More About:Money

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