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.

How can customers make their returns this year with minimal hassle? That’s easy – you’re just going to have to play ball with the retailer. If you provide a credit card, cell phone number or a photo I.D., your chances of getting your return approved increase. That’s because stores place a high premium on storing consumer data – it’s like spun gold to an increasingly technology-driven industry searching for new ways to figure out consumer spending patterns.

Asking for personal data – as unseemly as that is to many shoppers – also helps retailers beef up their direct mail lists. Often, stores use those databases to glean information on customers – information used to approve or deny the shopper’s return on the spot (taking the clerk’s discretion out of the equation).

Few consumers like to share personal financial data with giant companies. But if you want to return an item this holiday shopping season, the more data you deliver, the easier it might be.

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