Is it wrong to wear a piece of clothing once and return it for a refund? Some people would say, “No” to the question. Looking at various web sites there are some who mildly discourage the practice such as I found in a Market Watch column. The columnist, Quentin Fottrell responds in part to a query asking a similar question, “If you bought a dress that cost a lot of money, wore it to a party and realized you hated it and you would never wear it again, and it was still in pristine condition, then perhaps returning it would be understandable (though you might want to tell the sales staff that you did wear it once, to be 100% honest)”. He does go on to add, “But doing this regularly begins to cross a line”. If you are a clothing retailer, what is the impact of this practice, known as wardrobing on your business? Obviously the first thing to consider is can you sell the returned merchandise for full price? If you don’t sell it for full price, how much of a loss do you take on profit margin? One thing the writer pointed out that must be considered by retailers whose employees work on commission, is the negative impact on the sales person who sold the item being returned. How much of a game is played at their expense? Wardrobing isn’t harmless and retailers should make every effort to prevent it. One way to do so is by attaching Alpha Shark Tags to clothing.
Alpha Shark Tags prevent wardrobing because the retailers that use them can establish return policies that do not permit the return of clothing that has had Alpha Shark Tags removed. This works because the tag is a one-time use only device that clips onto articles of clothing, as well as shoes, purses, wallets, etc. The device is not to be removed by store employees at the time of the sale, as is the case with retail-anti theft devices. The Shark Tag has to be cut off by the purchaser after he or she leaves the store. A return can be denied when the tag has been removed, so long as the return policy is clearly stipulated. The tags are not going to interfere with the ability to try on merchandise, so clothing can be gifted and returned with a gift receipt and intact tag.
How big is the problem of wardrobing in the United States? According to The Retail Equation 2015 Consumer Returns in the Retail Industry Annual Return Survey, which incorporated the results of the National Retail Federation 2015 Return Fraud Survey Results, approximately 6.1% of returns in the U.S. were classified as Return Fraud and Abuse as a percent of total returns. The estimated amount of return fraud and abuse was 15.9 billion dollars. According to the loss prevention senior executives in the 62 retailer companies who were surveyed, 72.6% said their stores had experienced this type of fraud in the past year. One other key point from the report, “Fewer than half of retailers rated their return policies as effective” in deterring fraud.
Are the return policies in your store effective at preventing fraud? Do you even know if your store is experiencing return fraud? If 72.6% of Loss Prevention executives believe their stores have been impacted by wardrobing, then there is a strong likelihood it is taking place in your store(s) as well. By investing in Alpha Shark Tags and applying them to ALL of your clothing items and accessories, you can prevent being a victim of this activity. Keep you profits higher by reducing your exposure to fraud and having an “effective” return policy.
Return Fraud is important and we can help you with it. Call 1.770.426.0547 and let’s talk.