4
Retailers get tough on return policies
A receipt shows a store's return policy
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
TEXT OF STORY
Kai Ryssdal: In just a couple of minutes you'll hear a discussion of the economics of gift giving. I hope I'm not giving too much away here when I say you should think very carefully before you really shell out for something nice this year. First, though, the other end of that gift transaction.
Retailers are bracing themselves for waves of post-Thanksgiving shoppers later this week. That will inevitably be followed by waves of post-Christmas returns. Both legitimate and not. Fraud is on the rise. And retailers are often left holding the bag. Marketplace's Nancy Marshall Genzer reports.
NANCY MARSHALL GENZER: The National Retail Federation says stores will lose more than $2.5 billion this holiday season to fraud, including something known as friendly fraud. Friendly because consumers think of it as more bending the rules than stealing. Take chargebacks. That's when a shopper charges something, then tells the credit card company, "Hey, I never charged that." Or, they order something online and claim it never showed up. If merchants get hit with too many chargebacks, the credit card company will fine them, up to a $100 a pop.
JOSEPH LAROCCA: Retailers become a victim.
That's Joseph LaRocca. He's a loss prevention expert at the National Retail Federation. He says stores with lots of chargebacks also pay higher transaction fees to credit card companies.
LAROCCA: When you're doing millions of dollars of business or billions of dollars of business on a particular credit card, those transactions all add up.
And chargebacks aren't the only types of friendly fraud. We all know that shopper who buys it, wears it and returns it.
Valerie Folkes teaches marketing at the University of Southern California. She says times are tough, but consumers don't want to do without.
VALERIE FOLKES: What that leads to sometimes is, consumers engaging in behaviors that maybe they can justify to themselves are really OK, but in fact are really unethical.
Michael Fischer is bracing for a wave of holiday hucksters. His family owns two electronics stores in northwest Iowa. He says, in this economy, there's no wiggle room. So, if, someone buys a big screen TV for that Superbowl party, then returns it, there's no refund.
MICHAEL FISCHER: We don't have a lot of give. There's just no margin for error right now.
Fischer has company. The National Retail Federation says almost 16 percent of retailers surveyed will tighten their return policies this holiday season.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
Returns and exchanges will always be a part of retail. I think operators need to remove more of the obstacles of doing business and increase/improve service levels. In these economic times the tendency is to cut back on payroll, one of your only controllables. I say increase or maintain a higher level of staffing to provide increased service/sales, as well as detering theft through superior customer service. It will hurt your margins in the short run, but over the long haul you will earn greater market share and the respect and loyalty of your associates. Look at returns and exchanges as an opportunity to sell and build a relationship with the customer. This is something that is greatly lacking in todays market place.
Perhaps instead of stores getting tough on returns, as consumers will always find a way to get around the system, they should concentrate on offering the consumers better products and better services and not based sales on mark downs all the time. And sales people, even those on commission need to be taught to sell a product thats right for that customer and not to sell them anything just to make the sale.
We need to realize that for every dollar in losses, retailers have to add on $250.00 to make up each dollar. Who pays for it at the end -- the consumer. Not only do thieves shoplift from stores at an all time high, they are stealing from you and I since we are the ones who ultimately pay for their thievery. Did you also know that internal theft accounts for 48% of losses? What has happened to ethical and moral values in our society?
I my e-commerce business, we have found people who buy on impulse often want to return it later (ie big sales).
Sometimes as pointed out in the above article send it back gently used. This causes a situation where the product may not be as easy to resell. It is also harder on our service people, which costs us money.
Chargebacks happen, but since we switched to shipping via verified tracking methods, this has been reduced.
At this time of year, when so many things are being gifted, how do you transfer the receipt for warranty purposes?
I found www.warrantylife.com helps.
Richard
