3 Tips to Master Holiday Returns

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WASHINGTON (TheStreet) -- You don't want it and they don't want it, but when Christmas is over and you have unwanted presents retailers are loath to restock, there are ways of making them take your holiday return.

When retailers approach holiday return season, they're not nearly as concerned with customer satisfaction as they are with "best practices for accepting customer returns and controlling return fraud and abuse that help to maximize profits and minimize losses," as the National Retail Federation puts it in a recent report on Consumer Returns in the Retail Industry. They want to trim the $14.8 billion the NRF estimates was lost last year to "return fraud" -- usually stealing an item or paying for it with a stolen credit card or bad check and returning it for full cost, using counterfeit receipts; or buying an item such as a television just before the Super Bowl and returning it after use.

They also consider last year's $185.5 billion in returns "lost sales."

This means tighter return policies and tougher restrictions for consumers, who may soon have to have their driver's license scanned into a database when making returns, have that database used to approve or reject their purchases and have return policies withheld from them in an attempt to stop frequent offenders, as Smart Money magazine reported last month. This comes as annual return rates have jumped nearly 11% in the last three years.

Last year, little more than 8% of all purchases were returned, compared with 7.26% in 2007. That number rises to 10% to 20% for online retailers, according to Forrester Research, which credits Web retailers' liberal return policies and streamlined processes for the disparity. Returns around the holidays last year jumped to 9.75%, or 23% above the annual rate, but that didn't make retailers any more willing to help with those returns. While 52% of stores made return policies more lenient for the 2008 holiday, only 28% relaxed those policies last year.

"Don't leave that pair of jeans sitting around the house for a month, because in that month's time the item could be marked down or they could get a whole new style in, and that can drop the sales price," LaRocca says. "Retailers might be more reluctant to scrutinize the return."

With that in mind, TheStreet spoke with the NRF's senior asset protection adviser, Joe LaRocca, and Consumer Reports Executive Editor Greg Daugherty about how consumers can handle returns without getting hassled by retailers. Here are some simple steps to follow to ensure not only a happy return, but a full-priced one as well.

Make sure your recipient gets a gift receipt.

The big reason 60% of people the NRF surveyed give gift receipts along with presents is that it's a severe pain in the posterior if you don't. Retailers watch "receipted" returns like malnourished hawks, knowing full well that 16.4% of returns occurred without a receipt last year and that those "nonreceipted" returns cost them $30 billion in revenue. As a result, 70% of retailers require ID on receipt-free returns and are pushing a trend toward ID for all returns.

"If you're returning something, you probably want to bring ID with you," Consumer Reports' Daugherty says. "If you return a lot of items and you're a regular at the return, that may signal that there's something wrong and that you should keep that in mind when taking something back."

But what if you're the average consumer who has never committed "return fraud" in his or her life and just want to unload the thoughtless piece of nonsense they got from that relative they barely know? It's still a good idea for those people to make their return with a gift receipt, as it's the only way to ensure holiday leniency and full value for that return.

"The general guidance these days when giving a gift is that if a store is providing a gift receipt, take it and include it with the item," the NRF's LaRocca says. "That does a few things for your recipient: 1. When they bring it back, they'll know what store to go to. 2. When they go to the register, they'll be able to receive full price for the item instead of the current selling price, which could be significantly lower. 3. Now they have a receipt, so if the policy requires one or if there's an exception for gifts, that will help recipients navigate that path quickly."

Treat online purchases and store purchases differently.

Just because you found an item on a bricks-and-mortar store's website doesn't mean you can go right up to the return table at the nearest location and bring it back. Gap customers who try this will not only be turned away, but forced to pay $6 in shipping costs for each online item they send back.

Sears' Kmart and Home Depot customers also have to pay return shipping if the product is in good working order, while Barnes and Noble won't refund shipping costs on returns.

"You can't assume the store's return policy is the same online as it is at the store," Daugherty says. "It's usually some really long fine print on the Web site, unfortunately, but it's worth taking a look."

That said, Web-only retailers tend to have some of the sweetest return policies in the business. Most notable is Zappos', which allows full returns 365 days after purchase at no cost to the buyer.

"With most sites, there's a process to follow that requires a quick phone call or even done online where you receive a return authorization," La Rocca says. "In some cases the shipping company even covers the cost, so you want to make sure you understand what the cost might be and keep all the packaging material, the receipt and the invoice."

Know your return policy.

There's no universal return policy, and retailers' views on return vary wildly. The NRF says that while 84% of retailers kept their policies from last year, 11% actually tightened them -- extending return periods, but adding restocking fees.

Amazon, for example, has one overarching return policy, but nearly 30 others that vary by product. While Target allows exchanges without a receipt as long as exchanges in any given year are less than $75, Wal-Mart only gives cash back for gifts up to $25 and allows only three exchanges in 45 days before flagging a customer and requiring manager approval for another exchange.

Best Buy, meanwhile, allows only a 14-day return period on its computers, meaning Black Friday shoppers who bought laptops are out of luck if their recipient has one. Toys R Us, however, won't take back electronics at all if they're opened.

"If you get a present and you think there's a big possibility that you might return it, don't open it," Daugherty says. "Some stores, if the packaging is damaged, won't take it back at all, while other stores will charge you a restocking fee to take it back -- which is usually for electronic merchandise, but we've seen them spreading into separate segments."

Office Max, for example, charges a 15% restocking fee for opened items, Macy's places a 10% levy on furniture and mattresses, Target takes 15% for portable electronics and Amazon puts a 15% premium on open computers and up to 50% in fees on opened DVDs, used books and other items. Overstock.com, however, takes the title for stingiest retail returns by hitting customers with a 60% restocking fee on opened and late returns.

That's still better than no value it all, which is exactly what most retailers offer if you don't hit their return deadline. Amazon, Best Buy and Overstock take returns of gifts bought Nov. 1 or later until Jan. 31, but Staples' unlimited deadline for office supplies shrinks to Jan. 8 for everything else. Target, Toys R Us and Wal-Mart drop that deadline to 90 days after purchase -- with Wal-Mart and Toys R Us shrinking the window to 45 days for unopened electronics and PC accesstories and Wal-Mart alone giving customers 30 days for cameras and only 15 for PCs and cell phones.

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