No Refunds, Returns, Exchanges During Sale

Source: www.ebay.com

We nicknamed him “Watch Man.” For one month, the burly, six-foot, middle-aged, white American frequented the Jewelry and Accessories Department at the large retail store in West Hollywood where I worked. After making his first purchase of one of the more expensive wrist watches, he returned it a week later and used the total cash refund to buy another watch. On two subsequent occasions, he repeated the return-purchase transaction with different team members of our department. When his demands became obtrusive, he attracted the attention of the security staff. On that last visit, he left the store with his total cash refund, after having temporary use of four watches.

The practice of some buyers to purchase merchandise for temporary use occurred on a regular basis. On one occasion, I assisted a woman and her teenage daughter in selecting matching sets of necklace, earrings, and bracelet from our fine jewelry collection for an upcoming wedding. A week later, the Returns Department forwarded the same items to our department for re-stocking.

Notable practitioners of what I consider “free” rentals were the acquisitions people from film and theatrical companies. The store manager once assigned me to attend to one such buyer who purchased several items of jewelry and clothing. That sales transaction, of over a hundred items, was the largest I had ever handled. Two weeks later, we had the task of re-stocking all of the items, with the exception of one necklace.

The retail industry calls this practice of buying merchandise for temporary use “wardrobing,” owing to high returns of special-occasion clothing used for such events as graduations, weddings, Christmas parties, and job interviews. But the practice is not limited to clothing. Books, electronics, and power tools are other favorite items.

Perhaps, “free renters” do not see their behavior as fraudulent use of the retailer’s customer return policy, but rather as an entitlement. Since they return the merchandise, they probably do not accept responsibility for the seller’s financial loss in re-stocking and re-selling used merchandise at a reduced cost. After all, the seller recovers its losses by increasing sales prices, affecting all buyers alike.

The Return Fraud Survey Results 2011, issued by the National Retail Federation, reveals that fraudulent returns, including wardrobing, amounted to $14.37 billion in 2011. Of the 103 retail companies surveyed in October 2011, 61.4 percent suffered losses from wardrobing. As a result of the increase in wardrobing since 2009, 64 percent of retailers interviewed have changed their return policies in order to reduce fraud, making it harder for honest shoppers to make legitimate returns. Is the collapse of the American middle class responsible for this increase?

Several means exist for cash-strapped citizens to obtain goods at no or low cost, without resorting to fraudulent practices: libraries, swap meets, rental companies, thrift shops, garage sales, and installment payments using Pay Later Catalogs. Is this rise in “free renters” a sign of a breakdown in ethical conduct, so lacking in our leadership?