How much do you think retailers really lose on return fraud every year? In most surveys, the amount reported ranges from nine billion to fourteen billion. It is not only the loss of money either; there are several other factors involved. For one, the problem causes retailers to raise their prices in order to recover their losses. Many businesses work some of this into their budgets, but as shrink rises, something has to offset it. It also forces retailers to implement difficult and restricting return policies. Many stores have set up a “no receipt/no return” policy. Others have decided on time limits, like thirty to ninety days for returns. Some retailers have even invested in huge databases that track returns by license number, frequency, purchase amount, etc.
While those policy changes can help deter some return fraud, they do not stop wardrobing. This is the practice of people buying things they have zero intention to keep. Unfortunately with the recent recession, this type of return fraud has been on the rise. The person may purchase an expensive dress or accessory for a special occasion. Or they may buy the newest and greatest video camera for a wedding, graduation, or other special event. Then they wear or use the merchandise and bring it back for a full refund. These people justify this by telling themselves they’ve not caused the store any harm. They feel like they are just renting or borrowing what they need for when they need it, and the store is getting the stuff back. The flaw in the wardrobing ideology is that the store cannot resell the item for full price again in most cases. If the person waits to return the item, it may be out of season when they bring it back. This results in the store being forced to mark the item down and put it on a clearance rack. Or they may bring back something like lingerie or other things that must be simply discarded due to health reasons. Add the time wasted for your staff to restock the items to the sales floor, and you have lost a lot more than just the profits from the original sale.
Whether it be a brick and mortar building or an online only retailer, there is a simple effective solution to stop wardrobing. Three words: Alpha Shark Tags. Theses are simple gadgets that can put a stop to the “free rent” nonsense. Clip Alpha Shark Tags onto your inventory and you will take a serious bite out of return fraud. They snap right onto a garment or can be attached via lanyard. You can even attach a copy of your store’s return policy to the item with the tag. They are designed to be removed at home, by the customer, with a pair of household scissors. Once removed, the item is theirs to keep.These things are great because they can be clipped on at any time: delivery, before placing on sale display or even at point of purchase. Either way, they are quick and easy for your staff to utilize, and the customer is responsible for taking them off, so very little time is invested for such a great return.
The real cost of dealing with wardrobing is monumental. And allowing customers to just borrow your inventory and return it for full price is just not a working business model. Alpha Shark Tags are a reasonable solution to the problem.
For more information on Alpha Shark Tags, contact us or call: 1.770.426.0547