I enjoy looking up factoids for my articles. Despite my retail experience, I am often shocked by the information I find. In some cases, if I were a business owner, a few of the statistics would shake me up. Here are a few tidbits I came across on a website called “The Retail Equation”:
• The U.S. retail industry lost 10.8 billion to 17.6 billion to return fraud in 2014.
• Return fraud cost retailers and workers between 382,000 and 620,000 jobs last year.
• Retail Revenue losses are costing states a total of $663 million to $1.076 billion in lost sales taxes
The numbers are staggering. One of the major types of return fraud is wardrobing and it can be difficult to prevent. Due to the impact wardrobing has had on the retail industry; Alpha Shark Tags were created as a means to deter this activity.
Let me briefly explain the practice of wardrobing. Customers who engage in this behavior purchase clothes take them home and find ways to remove tags or conceal them. The merchandise is then worn to an event, a party, a social engagement or any other outing and usually returned within a few days. The tags are often reattached or “unhidden” and the item is returned for a refund. In the past, many retailers took these items back, even if there were indications they may have been worn. The idea was that often the customer was considered a “regular” and managers did not want to risk losing the patron. Besides, the excuse managers would use to take back the garments was that the customer had their receipt. Make up stains or odors on the clothes, well don’t worry about it, we’ll just mark it down or defect the item out of stock. Without a means of preventing the fraud other than turning down the return and risk causing a scene, or losing that “regular” customer, retailers were somewhat limited in their options. That is where Alpha Shark Tags come in to play.
Alpha Shark Tags are attached to clothes in a highly visible location and pinned closed. Once closed, they cannot be removed except by cutting them off of the garment. They are brightly colored to ensure they will be visible to other people. The tag therefore defeats the fraudulent attempt to look like a new item has been purchased for a night on the town. The tags have to be cut off by the purchaser once they get the clothing item home and choose to wear it. An optional, custom printed tag can be ordered to warn purchasers of the store return policy and remind them an item cannot be returned if the tag has been removed. The printed tag is pinned to the garment with the Alpha Shark Tag so the purchaser cannot claim to have seen a warning.
Unless you are renting out clothes, wardrobing is robbing your business of profitability. Marking down clothing due to damage or prior wear will reduce your profit margin or totally eat it away. If your store is marking clothing out of stock you are losing cost and profit. Taking into consideration the initial processing of the original sale, the time sales staff may have spent assisting the customer in the purchasing decision and finally the return processing, you are probably costing yourself money.
If you decide that return fraud is costing you money and you are now going to take steps to prevent wardrobing in your business, I have one final caution. Enforce your return policies. If you start using tags to deter fraud, be sure your associates clearly point out the return policy and the Alpha Shark Tags at the time of the sale. Make it clear that no returns will be accepted if the tag is removed. Post the return policy in a prominent location at your point of sale. Follow these suggestions and you can make a big impact on preventing return fraud in your store.
For more information on wardrobing contact us or call 1.770.426.0547