Holiday Returns About to Get Harder

In advance of the holiday shopping season, and with profit margins cut to the bone, retailers are taking a tough stance against merchandise returns – even if you have the receipt and never used the item.

Holiday shoppers are expected to be more aggressive with their spending this year – and that will inevitably mean more returns. Holiday spending is expected to rise 1.5% this year – up from 0.4% in 2009 and way up from the 3.9% drop in spending during 2008’s lackluster holiday shopping season, according to Chicago-based Archstone Consulting.

By and large, holiday spending accounts for 20% of all retail sales, and stores don’t want to give any of the cash back if they can avoid it. "This recession has certainly changed shopping and consumer patterns,” said Dave Sievers, strategy and operations practice leader for Archstone. “Retailers and manufacturers alike are actively changing strategies and tactics to react to those changes."

One such tactic is to make shoppers earn those returns through restrictions that make the process more of a burden. As Smart Money magazine recently reported, “the age of the easy return may be drawing to a close.”

Some measures include:

  • Asking for your driver’s license and scanning it into the store’s customer database (ostensibly to stop “return fraud” but with the added benefit of knowing where to send coupons and promotions).
  • Using customer databases to approve or reject purchases, as shoppers who habitually return items will find themselves on a “no return” list.
  • Keeping mum on return policies to thwart frequent offenders who leverage loopholes in the policy (note: they could also just remove the loopholes from their policies).

Retailers feel they have no choice and Smart Money estimates that roughly 10% of all sales transactions wind up as returns – a rate that has spiked upward during the Great Recession. The magazine pegs the total amount of returns during the 2009 holiday at $43 billion.