New return policy at Bloomingdale's to end 'wardrobing'

Some stores have no time limit on returns. Others ask no questions

And some consumers have no problem using that return policy.

Take the couple who filmed themselves returning a wedding gift at a Kohl’s department store in 2011 -- seven years after they were married.

“I’m so embarrassed right now,” the wife says in the YouTube video. “The receipt is like all worn out and everything.”

The cookie maker was unused but so old, the cashier couldn't find it in the system. But because Kohl’s has such a generous return policy, she happily gave the couple store credit.

"Seven years later, $32!” the wife says. “Let's go look in the house goods stuff."

At some stories, shoppers have returned items that were even 40 years old. The problem is that many returns are fraudulent, like products the buyer broke or power tools used for a weekend for construction project and handed back as if unopened.

“It’s a pretty widespread problem,” says Richard Mellor, vice president for loss prevention at the National Retail Federation. 

He says a particular concern for retailers is what’s known as “wardrobing,” when someone buys a product, say a prom dress, uses it once and then returns it the next day.

“It’s now affecting just shy of 65 percent of retailers we survey. Back in 2009, it was in the 45 percent range,” Mellor says.

Wardrobing is behind Bloomingdale’s decision to put big black tags on dresses that cost at least $150. The tags are attached in conspicuous places, and Bloomingdale’s won’t accept a return if the tags have been removed.

Wardrobing isn’t limited to clothing, however.  Mellor says retailers from construction equipment to electronics complain about the problem. Electronics retailers see spikes in TV and audio-equipment purchases before the Super Bowl, World Series and the Olympics, only to have them returned after the event.

Outdoor equipment retailer REI -- famous for its unlimited return policy -- has changed its policy, capping returns at one year because shoppers were bringing back so many items that the cost was “material to our profits,” according to an REI spokeswoman.

In all, fraudulent returns of all types cost the retail industry $8.8 billion last year. 

It’s tempting to blame the recession, but there may be a different explanation in an age where people publicize their use of generous return policies on YouTube or in blogs.

“It’s possible, though far from proven, that other people read or hear about it happening and might say, ‘Let’s do it ourselves,’” says Stephen Barkan, a sociologist at the University of Maine.

Problem is, those copycats ruin return policies for everyone else.

About the author

Sabri Ben-Achour is a reporter for Marketplace, based in the New York City bureau. He covers Wall Street, finance, and anything New York and money related.

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