Simple Solutions To Prevent Return Fraud Can Include Wardrobing Tags And Slight Review Of Return Policies

 



Wardrobing-5                                                                                                            WC Blog 453
Return Fraud-3

Simple Solutions To Prevent Return Fraud Can Include Wardrobing Tags And Slight Review Of Return Policies

     There are different times of the year when people have a tendency to purchase an item to use for a brief period of use and return it. Last year our area experienced Hurricane Matthew and people purchased power generators and when the power was restored they were taking them back to hardware stores for refunds. This might be good for the people who want one at a discounted price but for the stores that sold them it can be cause for a financial loss, depending on the condition of the unit when it was returned. For the first few years I worked for a big box retailer we sold lawn mowers. As the end of summer neared we would have a number of them returned (within the return date cut-off) and the customer would tell us how it no longer worked. A look at the machine often explained a lot about why it no longer worked. Swim suits would be returned by customers who had clearly worn them either for the summer or for the time they were on vacation. Proms were a notorious time for what is referred to as wardrobing. Our store didn’t sell tuxedos but we did sell prom dresses and you could always be ready to take several back that had obviously been worn but were within the store’s return policy guidelines. How about Halloween and all of those costumes our store sold? You guessed it we always had a number of them returned AFTER the Great Pumpkin failed to make another appearance. So what is the point of all these different returns? They are forms of refund fraud, but fraud that was in large part empowered by our own company policies.

     One thing I want to quickly mention is that I referenced wardrobing above. Some of you may not be familiar with this type of fraud so let me describe it. Wardrobing is a form of return fraud that makes it appear the customer is following a store’s own policies but they twist those policies. Where it is expected that a piece of clothing would be returned if it did not fit, had a defect or in the event it was a gift that was not well-received, those committing this fraud disregard that aspect of the policy. These people wear the item(s) intentionally, going out to parties or events appearing to have a new outfit and then return the merchandise within a few days. Frequently the clothing has smells that have permeated them and/or stains that have marred them. Unfortunately many retailers have loosened refund policies to the point that all they require are the tags and a receipt (and sometimes even the receipt isn’t required). 

     Eventually our business did tighten up policies on some things to prevent return fraud and in some instances we stopped carrying a specific line of merchandise. For example, the lawn mower issue became a big enough problem in terms of non-resalable merchandise being returned under the 90 day return policy that the company simply stopped selling them. Seasonal merchandise such as Christmas trees and Halloween costumes were limited in how much they could be returned for after the date of the holiday. Some items that seemed like they should be able to be turned down because they had obviously been worn such as bathing suits were still taken back. Often managers were afraid to refuse a refund because they didn’t want a complaint called in to company headquarters and sent down the chain to the district manager. 

     Was the best solution to a refund abuse problem to end the sale of a product line? I’m not sure about that, I didn’t have company data to look at regarding the P and L on the lawnmowers. If a business wants to impact return fraud, without hurting customer service tightening up return policies a little bit can be helpful. Another solution for clothing stores would be to use wardrobing tags to prevent customers from wearing an item and returning it. These are red tags that are pinned where they would be seen if the item is worn in public which would be rather embarrassing. The tag has to be cut off by the purchaser when they decide to keep the item and once it is removed the store policy dictates the item cannot be returned. Think about what that would do to help your profit margin while still maintaining a customer friendly environment.

     Before you make a move that would impact the variety of items your store carries or drastically restrict return policies. Look for the simple things you can do to keep clients happy and not take a hit on your bottom line. Wardrobing tags may be one solution for you to consider.
 Need information on wardrobing? Give us a call at 1.866.914.2567 now.

     

There are different times of the year when people have a tendency to purchase an item to use for a brief period of use and return it. When our area experienced Hurricane Matthew, people purchased power generators and when the power was restored they were taking them back to hardware stores for refunds. This might be good for the people who want one at a discounted price but for the stores that sold them it can be cause for a financial loss, depending on the condition of the unit when it was returned. For the first few years I worked for a big box retailer we sold lawn mowers. As the end of summer neared we would have a number of them returned (within the return date cut-off) and the customer would tell us how it no longer worked. A look at the machine often explained a lot about why it no longer worked. Swim suits would be returned by customers who had clearly worn them either for the summer or for the time they were on vacation. Proms were a notorious time for what is referred to as wardrobing. Our store didn’t sell tuxedos but we did sell prom dresses and you could always be ready to take several back that had obviously been worn but were within the store’s return policy guidelines. How about Halloween and all of those costumes our store sold? You guessed it we always had a number of them returned AFTER the Great Pumpkin failed to make another appearance. So what is the point of all these different returns? They are forms of refund fraud, but fraud that was in large part empowered by our own company policies.
     

One thing I want to quickly mention is that I referenced wardrobing above. Some of you may not be familiar with this type of fraud so let me describe it. Wardrobing is a form of return fraud that makes it appear the customer is following a store’s own policies but they twist those policies. Where it is expected that a piece of clothing would be returned if it did not fit, had a defect or in the event it was a gift that was not well-received, those committing this fraud disregard that aspect of the policy. These people wear the item(s) intentionally, going out to parties or events appearing to have a new outfit and then return the merchandise within a few days. Frequently the clothing has smells that have permeated them and/or stains that have marred them. Unfortunately many retailers have loosened refund policies to the point that all they require are the tags and a receipt (and sometimes even the receipt isn’t required). 
     

Eventually our business did tighten up policies on some things to prevent return fraud and in some instances we stopped carrying a specific line of merchandise. For example, the lawn mower issue became a big enough problem in terms of non-resalable merchandise being returned under the 90 day return policy that the company simply stopped selling them. Seasonal merchandise such as Christmas trees and Halloween costumes were limited in how much they could be returned for after the date of the holiday. Some items that seemed like they should be able to be turned down because they had obviously been worn such as bathing suits were still taken back. Often managers were afraid to refuse a refund because they didn’t want a complaint called in to company headquarters and sent down the chain to the district manager. 
     

Was the best solution to a refund abuse problem to end the sale of a product line? I’m not sure about that, I didn’t have company data to look at regarding the P and L on the lawnmowers. If a business wants to impact return fraud, without hurting customer service tightening up return policies a little bit can be helpful. Another solution for clothing stores would be to use wardrobing tags to prevent customers from wearing an item and returning it. These are red tags that are pinned where they would be seen if the item is worn in public which would be rather embarrassing. The tag has to be cut off by the purchaser when they decide to keep the item and once it is removed the store policy dictates the item cannot be returned. Think about what that would do to help your profit margin while still maintaining a customer friendly environment.
     

Before you make a move that would impact the variety of items your store carries or drastically restrict return policies. Look for the simple things you can do to keep clients happy and not take a hit on your bottom line. Wardrobing tags may be one solution for you to consider. 

 

Need information on wardrobing? Give us a call at 1.866.914.2567 now.
     

 

 

Do Gift Cards Remove The Incentive To Commit Return Fraud? Part 1

 

Wardrobing-5                                                                                                                    WC Blog 441
Return Fraud-3
Do Gift Cards Remove The Incentive To Commit Return Fraud? Part 1 
     As a Retail Loss Prevention Manager I remember getting frustrated at the growing trend I was seeing over the years of people returning merchandise without receipts and we stopped issuing cash back or credit card credit and started giving refunds back in the form of a store credit or gift card. I wanted to see more even exchanges for no-receipt refunds. The concept behind the gift cad issuance as I understood it was, if we give a gift card we are keeping the money in the store so we really don’t lose anything. On the surface it sounds right. The person committing the fraud can only use the store gift card in our stores so I guess it really does stay in the store. Then I started finding that those committing return fraud were turning right around and attempting to sell the gift cards to customer in the parking lot or in the store. We would chase them off letting them know we had a no-solicitation policy. That worked for a bit and then we found out through an apprehended shoplifter that he was returning stolen merchandise, getting gift cards as a refund and then taking the gift cards to local pawn shops and selling them. Added to the mess of fraudulent returns were those who engaged in wardrobing. Their returns were more complicated because while fraudulent they didn’t meet the criteria of fraud for any type of prosecution.
     What is wardrobing you may ask? It is a type of return fraud when the person intentionally buys an item to wear once or twice and then return for a full refund. The customer makes the purchase, keeps the tags on the clothing by hiding them and of course keeps the receipt. They may also carefully remove tags and replace them when they are ready to take the garments back to the store. The merchandise is worn to dinner, an event or party and it appears the person has a new addition to their clothing repertoire. Rather than keep the clothes and continue to wear them in the future they go back to the store for a full refund. Making matters worse for the retailer is that many times the clothing being returned by a wardrobing customer is that the merchandise has odors from perfume, cologne, food or cigarettes or there may be make-up stains or food stains.
     As gift cards have become a more popular form of credit for retailers to avoid the “incentive” of giving cash back for fraudulent transactions the need for selling the cards on the street or in pawn shops has been eliminated. There are now online web sites that will purchase gift cards from people. One web site claims a gift card seller can get up to 92% of the value of a gift card. As I perused the site I found I could buy a $100 CVS gift card for $90 and another website offered a $25 American Outfitters gift card for $19. I found that the website tells a seller that a credit card has to be on file so they will charge it if it is found a gift card was obtained through fraudulent or illegal means. What was not clear to me is how they make this determination? While there are some gift cards I was able to put a stop on because I could prove they were obtained through fraudulent means, such as the use of a stolen credit card or stolen checks, those situations were the exception. I don’t know how or if the site can determine gift cards were obtained through return fraud.
     By the way, if someone is committing wardrobing fraud in most cases they don’t worry about getting the gift card. They are receiving cash back because they have all of the proper tags and receipts. There may be a few situations where they receive the gift card because of excessive wear and tear on the garment but often they raise their voices and create a scene to get their way. In part 2 of this article I will discuss how retailers can deal with wardrobing versus other types of fraud. 
Get more information on return fraud contact us or call 1.866.914.2567 today.
     

As a Retail Loss Prevention Manager I remember getting frustrated at the growing trend I was seeing over the years of people returning merchandise without receipts and we stopped issuing cash back or credit card credit and started giving refunds back in the form of a store credit or gift card. I wanted to see more even exchanges for no-receipt refunds. The concept behind the gift card issuance as I understood it was, if we give a gift card we are keeping the money in the store so we really don’t lose anything. On the surface it sounds right. The person committing the fraud can only use the store gift card in our stores so I guess it really does stay in the store. Then I started finding that those committing return fraud were turning right around and attempting to sell the gift cards to customer in the parking lot or in the store. We would chase them off letting them know we had a no-solicitation policy. That worked for a bit and then we found out through an apprehended shoplifter that he was returning stolen merchandise, getting gift cards as a refund and then taking the gift cards to local pawn shops and selling them. Added to the mess of fraudulent returns were those who engaged in wardrobing. Their returns were more complicated because while fraudulent they didn’t meet the criteria of fraud for any type of prosecution.

What is wardrobing you may ask? It is a type of return fraud when the person intentionally buys an item to wear once or twice and then return for a full refund. The customer makes the purchase, keeps the tags on the clothing by hiding them and of course keeps the receipt. They may also carefully remove tags and replace them when they are ready to take the garments back to the store. The merchandise is worn to dinner, an event or party and it appears the person has a new addition to their clothing repertoire. Rather than keep the clothes and continue to wear them in the future they go back to the store for a full refund. Making matters worse for the retailer is that many times the clothing being returned by a wardrobing customer is that the merchandise has odors from perfume, cologne, food or cigarettes or there may be make-up stains or food stains.

As gift cards have become a more popular form of credit for retailers to avoid the “incentive” of giving cash back for fraudulent transactions the need for selling the cards on the street or in pawn shops has been eliminated. There are now online web sites that will purchase gift cards from people. One web site claims a gift card seller can get up to 92% of the value of a gift card. As I perused the site I found I could buy a $100 CVS gift card for $90 and another website offered a $25 American Outfitters gift card for $19. I found that the website tells a seller that a credit card has to be on file so they will charge it if it is found a gift card was obtained through fraudulent or illegal means. What was not clear to me is how they make this determination? While there are some gift cards I was able to put a stop on because I could prove they were obtained through fraudulent means, such as the use of a stolen credit card or stolen checks, those situations were the exception. I don’t know how or if the site can determine gift cards were obtained through return fraud.

By the way, if someone is committing wardrobing fraud in most cases they don’t worry about getting the gift card. They are receiving cash back because they have all of the proper tags and receipts. There may be a few situations where they receive the gift card because of excessive wear and tear on the garment but often they raise their voices and create a scene to get their way. In part 2 of this article I will discuss how retailers can deal with wardrobing versus other types of fraud. 

 

Get more information on return fraud contact us or call 1.866.914.2567 today.

     

 

 

Liberal Return Policies Do Not Mean Retailers Have To Put Up With Wardrobing Return Fraud If They Use Alpha Shark Tags

 

Return Fraud-3                                                                                                         WC Blog 435
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Alpha Shark Tags-4
Liberal Return Policies Do Not Mean Retailers Have To Put Up With Wardrobing Return Fraud If They Use Alpha Shark Tags
     In the effort to increase sales and drive customer satisfaction many stores have implemented extremely liberal return and refund policies. I understand the premise behind this, make things easier for the customer, trust that they will not abuse your policies and they are more likely to be long-term patrons. Customer service can make or break a business and so balancing the need for making a profit with keeping your customer base happy can be tricky. In the office supplies store I work for we try hard to make reasonable returns for our patrons. A customer may bring back an ink cartridge for a printer without a receipt and explain that they had picked out the wrong one. They may be required to produce a picture I.D. but unless they have completed too many no receipt returns they will be able to get a refund. It’s good business. Many times they will turn around and purchase the correct cartridge. For non-clothing merchandise this can be easier to do than conducting refunds for clothing, whether the customer has the receipt or not. There are customers who engage in something called wardrobing and this fraud can make it hard on store managers to not tighten up return policies. Stores do have one sure method to fight this type of return fraud and that is the use of Alpha Shark Tags on clothing.
     What is wardrobing? Why is it so deceptive? What are Alpha Shark Tags and how can they prevent this kind of fraud? Wardrobing is an intentional act of purchasing clothing with the knowledge that the clothes will be worn a time or two and returned for a full refund. It is deceptive because of the intent behind it and those who do it find ways to keep the tags intact on the merchandise. Sometimes the tags are taped inside the clothes for example up the sleeve of a shirt, or hanging inside the collar. In extreme cases the perpetrator will use a swift tag attachment gun to reattach tags to clothing. In this type of fraud the “customer” has the original receipt and all tags match up to it. Alpha Shark Tags prevent this type of return fraud because they can only be removed once and that is by being cut off. When merchandise is purchased these tags are left on the items. The customer gets the item home, tries it on again and if they are sure they want the item, the customer cuts off the tag and wears the item. The store has a crystal clear return policy that lets the patron know they cannot make a return once the tag is removed.
     Why can’t the customer who is intent on wardrobing simply hide the Alpha Shark Tag like they do with the manufacturer hang tags? The reason is that the tags are a bright red color so they stand out on the clothing. When properly pinned in a highly visible location such as on a shirt sleeve or pant leg seam the tag can’t be concealed. It becomes obvious to others that the person wearing the clothing intends to return it. The façade of someone trying to look like they have an ever-growing wardrobe is stripped bare.
     Does the use of the Shark Tag hurt the retailer who is trying to be flexible with their customers? I don’t believe it does. The customers who are honest will understand the purpose of the tags. The tags don’t negate the ability of a customer to return defective merchandise if a tag has been removed. What they do prevent is someone wearing clothes to a party, getting them stained with food or drink or drowned in perfume or cologne and then getting a refund the next day.
     Is a liberal return policy what drives profits? I don’t know that it does. I think what drives sales is great customer service, beginning with a friendly sales staff. Sales are driven when we take time to talk with our customers, learn what they are looking for and give advice on what we honestly think will enhance their purchase or their needs. Honest customers don’t expect a retailer to be the victim of return fraud or to lose money they want fair treatment and usually will reciprocate in kind. 
Alpha Shark Tags are important and we can help you with it. Call 1.866.914.2567 now.

In the effort to increase sales and drive customer satisfaction many stores have implemented extremely liberal return and refund policies. I understand the premise behind this, make things easier for the customer, trust that they will not abuse your policies and they are more likely to be long-term patrons. Customer service can make or break a business and so balancing the need for making a profit with keeping your customer base happy can be tricky. In the office supplies store I work for we try hard to make reasonable returns for our patrons. A customer may bring back an ink cartridge for a printer without a receipt and explain that they had picked out the wrong one. They may be required to produce a picture I.D. but unless they have completed too many no receipt returns they will be able to get a refund. It’s good business. Many times they will turn around and purchase the correct cartridge. For non-clothing merchandise this can be easier to do than conducting refunds for clothing, whether the customer has the receipt or not. There are customers who engage in something called wardrobing and this fraud can make it hard on store managers to not tighten up return policies. Stores do have one sure method to fight this type of return fraud and that is the use of Alpha Shark Tags on clothing.

What is wardrobing? Why is it so deceptive? What are Alpha Shark Tags and how can they prevent this kind of fraud? Wardrobing is an intentional act of purchasing clothing with the knowledge that the clothes will be worn a time or two and returned for a full refund. It is deceptive because of the intent behind it and those who do it find ways to keep the tags intact on the merchandise. Sometimes the tags are taped inside the clothes for example up the sleeve of a shirt, or hanging inside the collar. In extreme cases the perpetrator will use a swift tag attachment gun to reattach tags to clothing. In this type of fraud the “customer” has the original receipt and all tags match up to it. Alpha Shark Tags prevent this type of return fraud because they can only be removed once and that is by being cut off. When merchandise is purchased these tags are left on the items. The customer gets the item home, tries it on again and if they are sure they want the item, the customer cuts off the tag and wears the item. The store has a crystal clear return policy that lets the patron know they cannot make a return once the tag is removed.

Why can’t the customer who is intent on wardrobing simply hide the Alpha Shark Tag like they do with the manufacturer hang tags? The reason is that the tags are a bright red color so they stand out on the clothing. When properly pinned in a highly visible location such as on a shirt sleeve or pant leg seam the tag can’t be concealed. It becomes obvious to others that the person wearing the clothing intends to return it. The façade of someone trying to look like they have an ever-growing wardrobe is stripped bare.

Does the use of the Shark Tag hurt the retailer who is trying to be flexible with their customers? I don’t believe it does. The customers who are honest will understand the purpose of the tags. The tags don’t negate the ability of a customer to return defective merchandise if a tag has been removed. What they do prevent is someone wearing clothes to a party, getting them stained with food or drink or drowned in perfume or cologne and then getting a refund the next day.

Is a liberal return policy what drives profits? I don’t know that it does. I think what drives sales is great customer service, beginning with a friendly sales staff. Sales are driven when we take time to talk with our customers, learn what they are looking for and give advice on what we honestly think will enhance their purchase or their needs. Honest customers don’t expect a retailer to be the victim of return fraud or to lose money they want fair treatment and usually will reciprocate in kind. 

 

Alpha Shark Tags are important and we can help you with it. Call 1.866.914.2567 now.