Modern data monitoring has begun to allow retailers to crack down on perceived abuses of their item return policies.

鈥淩eturning things is an important element about retail businesses, as is how you handle returns can make or break you,鈥� said Michael LeBlanc, senior retail advisor with the Retail Council of Canada.

鈥淚t鈥檚 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.

鈥淵ou can reach a point where it is not sustainable as a business to have a high level of returns.鈥�

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鈥� 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 鈥渕aking returns and exchanges鈥� 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.

鈥淩etailers are allowed to set their own refund/return policies,鈥� 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 鈥渢ouch and feel鈥� shopping experience for items as opposed to shopping on your phone or home computer.

鈥淚f you are buying clothes or shoes online, the tendency for many is to order multiple sizes because you don鈥檛 know exactly how they will fit. You keep the one that fits best and return the other items,鈥� he said.

鈥淲hat 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. 鈥�

LeBlanc says in many cases, once a product box is opened or used, it often either can鈥檛 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鈥檛 take unsaleable products back.

He said criminals have been aggressive in seeking out the weakest link in retailers鈥� return policies they can profit from, citing the example 鈥減orch pirates鈥� who follow or monitor truck deliveries for online products, steal them after being delivered and seek to return the item for cash reimbursement.

鈥淭hat 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,鈥� LeBlanc said.

鈥淭here 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.鈥�

barry.gerding@blackpress.ca
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