Good news for those of you with generous-yet-misguided relatives who, year after year, mail you a big box of kid-size clothing for Christmas: Many retailers are easing up on return policies thanks to new software, Retail Equation, that allows them to weed out "serial returners," or people who regularly buy merchandise with the intent to return it after using or wearing it. This process, which retailers have given the boring nickname "wardrobing," caused stores to lose an estimated $14.8 billion last year. Now that stores are able to use Retail Equation to keep tabs on people who regularly return items, a few of them (Macy's and Best Buy, for example) have relaxed their policies with the intention of keeping an eagle eye on folks who try to exchange their deoderant-streaked New Year's Eve outfits on January 1st.
Which seems like a good thing for everyone, because studies have shown that consumers actually buy more overall when they feel like they have the option to return things later. Reports The Wall Street Journal:
V. Kumar, a Georgia State University professor who has studied the impact of return policies on sales, said chains underestimate the toll that restrictive policies take on retailers' reputations. In a study published in the Massachusetts Institute of Technology's Sloan Management Review last spring, he concluded that while retailers with looser return policies experience far higher return rates, they also have better sales, profits and word of mouth than stricter competitors. "It is about time retailers started realizing they need to relax return policies," Mr. Kumar said. "Psychologically, people perceive less risk in buying from retailers with more relaxed policies. It makes people buy more."
A few questions about this software remain unanswered, though. Now that stores have the technology to smoke out serial returners, what exactly will they do to them? Will those who "wardrobe" regularly be banned from shops or given different return privileges from other shoppers? In any case, you'd best keep track of those gift receipts.
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