Either through higher prices or with tougher return policies, every one of us pays for those that commit return fraud. In a recent survey, 70% of those businesses asked said they had made changes to their return policies and 25% of those asked responded that they had made their policies much stricter. Considering that annual return rates are around 7.3% of all sales, and it goes up to 8.8% during the 4th quarter holiday season, stores have to make adjustments now to combat the loss of sales associated with returns. 


There are many different ways to handle refunds and exchanges to help put a dent in return fraud Many stores keep track of them through a database recording their driver’s license numbers. When they’ve reached their yearly limit, they are denied any further returns for at least that year. The problem with that approach is the fact that they can simply get around it by having a family member or friend bring it back for them.  Many retailers have an exchange only policy. That means they will replace the item with another item of equal or lesser value, but they will not give the person their money back. This idea does work for those trying to return stolen items just so they can get the money or even store credit.  But it also punishes those customers that are truly unhappy with their purchase. And really, if the store is giving the person merchandise, it’s just as bad as giving them the money. The store still had to purchase the inventory, so the retailer is still losing profit either way. 


The most common knee jerk response for many businesses to battle return fraud is a “no receipt, no return” tactic. So, without proof of purchase, they will send you back out the door whether you really bought it or not. In many cases, this can be a real customer service killer. It also is completely useless to another refund villain, the customer participating in the practice of wardrobing. Yes, this arch enemy of all retailers’ worldwide buys stuff but never once intends to keep it. They go into small boutiques or even big box stores and buy the nicest dress, shoes, purse, and maybe even all the accessories to go with their ensemble. They buy all this with no concern or worry about how much it costs. They wear it all to their big event, get all sorts of compliments, and then they bring it all back to the store the next day expecting a full refund. They have their receipts for goodness sakes; it’s not like they stole it. Wardrobing is absolutely a type of return fraud, but many times these people portray themselves as the victims of buyer’s remorse and will have a fit if the store refuses their refund. 


The answer to this type of theft is simple: Alpha Shark Tags. They are simple, yet extremely effective tools that you clip on to a very prominent place on the item. (You can attach it via lanyard as well, and you can even use the clip to attach a copy of the return policy right onto the item.)  When the customer gets home, they can cut off the Alpha Shark Tags with a simple pair of household scissors. But the catch is that once the tag is removed, the item becomes non-returnable. It’s that easy. And you stop this “free rent” type of return fraud in its tracks. 


For more information on return fraud, contact us: 1.770.426.0547