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A customer reveals questionable practices allegedly widespread among retailers – To know

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It’s important to note that sweeping statements like “almost all retailers are involved in a scam” may not accurately represent the practices of all businesses. While there have been instances of unethical behavior by certain retailers, it’s essential to approach such claims with a critical mindset and seek verified information.

If a customer has specific concerns or evidence regarding a particular retailer’s practices, they should consider reporting it to relevant consumer protection agencies, filing a complaint with the Better Business Bureau, or sharing their experience through online reviews. Transparency and accountability are crucial in maintaining trust between businesses and consumers.

A customer reveals questionable practices allegedly widespread among retailers - To know

If you have more details about the specific scam or concerns raised by the customer, I can provide information or guidance based on that context.

Over the past few years, stores have made it easier for customers to return items bought online in order to attract more customers and increase sales.

Although, these changes have cost something.

Retailers have taken steps to stop scams as more people shop online and send back more of their purchases. People can sometimes return items that aren’t what they bought, items that were stolen, or claims that an order never arrived when it actually did.

A poll by Appriss Retail and the National Retail Federation found that retailers think 13.7% of returns last year, or $101 billion worth, were fake. The survey found that 16.5% of returns, or $24.5 billion worth, were likely to be fake during the busiest Christmas season.

These items are still coming back in because many stores let you return items bought in November and December until the end of January. Experts in the field say that as stores deal with all of these returns, theft has become their biggest worry.

Pitney Bowes vice president of go-to-market support and experience Vijay Ramachandran said, “Fraud is No. 1, and it’s not even close to No. 2.”

Already, it costs a lot to process an online return: A Pitney Bowes survey of 168 stores found that it takes 21% of the value of the order on average. About half of the companies that answered paid more than 21%.

Shipping and processing fees are going up, and fraud is also on the rise, which is making it more expensive to handle returns. As more businesses use these tricks, more are making it harder to return things.

The CEO of a company that helps businesses deal with theft and fraud, Michael Osborne, said, “Retailers are forced to, at the very least, change their policies slightly to account for that potential fraud and abuse” when fraud is on the rise, like it has been this year based on the data. “Yes, it does make their costs go up and their profit margin shrink.”

Marc Metrick, CEO of Saks, said at the NRF Big Show in mid-January that the store has always had real complaints from customers about missing things, but that over the past few years, the number of fake “merchandise not received” complaints has more than doubled.

This is one way that scammers try to get money back.

According to Ramachandran from Pitney Bowes, the most common type of return scam is sending back an empty box or something different than what was sent, like a box of bricks instead of a TV. Thieves could also return stolen goods in other situations. As an alternative, they could look through trash to find a ticket, then go into the store, pick out the item, and bring it to the return desk.

“Someone will buy a product on sale or during a promotion and then return it for full price to get the delta of that benefit back to them,” Osborne of Appriss Retail said. “This is basically stealing those extra dollars.”

“They’re also credit laundering, which means they use gift cards or store credit to buy something, then return it and put the money back on a different card. This lets them use the money from a gift card or credit that was stolen or obtained fraudulently,” he said.

According to Appriss Retail, one person made more than $224,000 by returning more than 1,000 items fraudulently to 215 stores in various states using different return methods.

Abuse of returns happens more often.
There is also behavior that isn’t as bad and is usually thought of as return abuse instead of scam. These words are used: “bracketing” or “wardrobing.”

Shopping “bracketing” means buying more than one size or color so they can return the one that doesn’t work for them. It’s not theft, but the store still has to pay for the return. “Wardrobing,” which is when people buy something, use it, and then return it, is seen as a bigger problem.

56% of consumers say they have done “wardrobing,” according to a study from Forter, a company that wants to stop fraud. Four out of five people who bought something during the 2023 Christmas season planned to return it after using it.

Head of Risk for Forter Doriel Abrahams said that planned, conscious returns after use are the worst kind.

Fourteen percent (47%) of those who planned to “wardrobe” for the holidays were between the ages of 18 and 34, according to Forter. A lot of different things are “wardrobed,” not just clothes.

People have told me that every time they move, they buy tools like drills and put up shelves and other things they need and then send it all back, Abrahams said.

What stores are doing to stop return scams

Return fraud is hurting honest shoppers as stores make their rules tighter to stop abuse, say people who keep an eye on the tactics.

As for me, I see it as the Plexiglas at the shop, which is really ruining your experience. “We have to do a version of that on our website, which makes things harder for customers, even the good ones,” Metrick said of Saks. “That is a problem for us, and we intend to resolve it.”

Due to return scams, some stores have made their rules stricter for all customers. Some companies even use AI and other technologies to make their return policies more personal, so they may be different for each person.

Osborne said, “Some stores let you have different return windows based on your known history with that store. It’s kind of like a loyalty program status level.” He said that approach is being used by some companies, like Amazon, and “other retailers need to go there.”

Amazon did not say yes or no to the question of whether it is seeing more return scams. Amazon is getting better at finding and stopping fraud before it happens, according to a spokesperson for the company, Kristina Pressentin. She also said that the company “uses advanced machine learning models to proactively detect and prevent fraud, as well as employs specialized teams dedicated to finding, investigating, and stopping fraud.”

In an increasingly competitive retail market, companies have tried to keep customers happy by making it easy for them to return items. According to a survey by Appriss Retail and Incisiv, 73% of shoppers choose a store based on how easy it is to return items, and 58% want a smooth, no-questions-asked return experience across all platforms.

But businesses have to find a way to please those customers while also trying to cut down on return costs and fraud and abuse.

Abrahams from Forter said, “It’s not a coincidence that all of a sudden, eight months ago, almost every company started to charge for shipping returns or made their return policies stricter.” There’s money talking. At the end of the day, if you find that you’re spending too much on things like restocking, verifying returned items, or shipping costs for returns, you’ll have to charge your customers for those costs.

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