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

Submit letters to the editor through our website, via email or in writing.
LETTER: Churches should be open

Some Fraser Valley churches defied orders to close and a Surrey letter writer says let churches open

The B.C. Legislature in Victoria, B.C. is shown on Wednesday, June 10, 2020. THE CANADIAN PRESS/Chad Hipolito
Langley to seek COVID-19 infrastructure grants

The provincially-administered funds could be used in flood prevention

Langley’s Maryalice Wood, 71, won Cranberries BC Culinary Contest in October 2020 for her cranberry walnut cheese ball recipe. (Coreen Rodger Berrisford/Special to Langley Advance Times)
Langley woman creates winning cranberry walnut cheese ball recipe

Maryalice Wood won the Cranberries BC Culinary Contest

Submit letters to the editor through our website, via email or in writing.
LETTER: Langley resident disappointed with paper’s lack of Nov. 25 coverage

Reader critical of paper for not covering International Day of Elimination of Violence Against Women

Townhouses for sale in the Willoughby neighbourhood of Langley on Dec. 2, 2020. (Matthew Claxton/Langley Advance Times)
Houses selling fast in Langley in November

Real estate markets continued to see high sales and rising prices

Provincial health officer Dr. Bonnie Henry updates B.C.’s coronavirus situation at the legislature, Nov. 30, 2020. (B.C. government)
Hockey team brought COVID-19 back from Alberta, B.C. doctor says

Dr. Bonnie Henry pleads for out-of-province travel to stop

B.C. Premier John Horgan on a conference call with religious leaders from his B.C. legislature office, Nov. 18, 2020, informing them in-person church services are off until further notice. (B.C. government)
B.C. tourism relief coming soon, Premier John Horgan says

Industry leaders to report on their urgent needs next week

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

An RCMP cruiser looks on as a military search and rescue helicopter winds down near Bridesville, B.C. Tuesday, Dec. 1. Photo courtesy of RCMP Cpl. Jesse O’Donaghey
B.C. Mountie, suspect airlifted by Canadian Armed Forces from ravine after foot chase

Military aircraft were dispatched from Comox, B.C., say RCMP

Photo by Dale Klippenstein
Suspect tries to thwart police in Abbotsford with false 911 call about men with guns

Man twice sped away from officers and then tried to throw them off his trail

An 18-year old male southern resident killer whale, J34, is stranded near Sechelt in 2016. A postmortem examination suggests he died from trauma consistent with a vessel strike. (Photo supplied by Paul Cottrell, Fisheries and Oceans Canada)
“We can do better” — humans the leading cause of orca deaths: study

B.C. research reveals multitude of human and environmental threats affecting killer whales

A logo for Netflix on a remote control is seen in Portland, Ore.,Aug. 13, 2020. Experts in taxation and media say a plan announced Monday by the government will ultimately add to the cost of digital services and goods sold by foreign companies. THE CANADIAN PRESS/AP-Jenny Kane
‘Netflix tax’ for digital media likely to raise prices for consumers, experts say

The government says Canadian companies already collect those taxes when they make digital sales

Most Read