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From the UK: How Returning Goods And Fraudulent Deliveries Affect a Business

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shutterstock_289919336When I make a purchase, in most instances it is a well researched and thought out process. I rarely make any impulse purchases, and 90.5% of the time shop from a list.

I make lists for everything, and not just food shopping.

I make lists for clothing I may need in the future, computer items, travel accessories, you name it, I have a list for it.

It has got to the point where I even write down the price of the items I may be looking for. Just an estimate. Its like a little game I play with myself to see how close in the total costs I can be.

But I digress…

The other day I made a purchase, and had not done the research on the item in question as I would usually do. The item only cost £5, but I still would have looked to see if any reviews had been posted about it, and this would help me in making my purchase decision.

I still would make the purchase, but perhaps not this particular brand.

As it turned out, I made the purchase, came home, felt the product was not very well made, looked up reviews online, found out the reviews were very poor, so I felt the need to return the product to the store.

I went back to the store, explained why I wished to return the item in question, and the store refunded my money (£5), no questions asked.

This was probably the first item I have returned to a shop in about 15 years. It was almost 15 years ago I ordered a back pack and when it arrived it was nothing like it was advertised to be, so I sent it back.

My partner on the other hand, while not a “serial returner”, or “returnaholic”, she is in the 25% category. Which means one of out four purchases she makes, may get returned, more likely exchanged due to size or her not trying it on. Yes, we are discussing clothing.

In these instances my partner may not have tried an article of clothing on prior to making the purchase, or she ordered the item online, and upon arrival she did not like how it looked, or again the sizing was off.

Personally I cannot order any clothes or especially shoes, online. I have to physically try clothing and shoes on first to insure an accurate fit. I blame the clothing manufacturers as I think they mess with the sizing and cut.

As a shop or major retailer, you do need to have a returns and refunds policy. Some stores, and especially online retailers, seem to have a pretty liberal returns policy. Which is somewhat understandable, you are not physically seeing an item, and if upon arrival it is not what you had thought it to be, or live up to what it is advertised to be, you need to return it.

Habitually Returning Items

Constantly or habitually returning items someone has purchased, has them termed as a “serial returner”, or “returnaholic”.

You have to wonder who sits around and makes up all these new terms and definitions.

However, regardless of who makes up the terms, there are those that return goods on a very regular basis, and these returns are having a “negative affect” on some businesses.

A survey by Barclaycard found that six in 10 retailers were affected in a negative way by serial returns, and that one in five retailers had increased their prices to cover this additional expense.

It costs a retailer money to take an item back, and in some instances the store may even charge a restocking fee.

The study estimates that 30% of shoppers overbuy and return items on a frequent basis.

Over half of the shoppers surveyed stated that the stores returns policy affects if they purchase from them or not, and that standardised sizing would make it easier to buy, and not have to order multiple items to see if they fit.

In addition, if a shopper had to pay to return an item, be it postage or a restocking fee, they would not order.

The Director of Customer Solutions at Barclaycard Global Payment Acceptance, Sharon Manikon said, “Today’s time-pressed shopper expects the process to be fast, easy and free – and that applies to both buying goods as well as returning them.”

“Online spending will continue to rise and the need to keep pace with customer demands presents a dilemma for businesses needing to protect their bottom line.”

“From developing universal sizing to offering virtual dressing rooms, the key for today’s businesses is to determine which innovations work best for them while ensuring they don’t lose out to their more savvy competition.”

shutterstock_393676066Retailers Take Action

Retailers are not going to just sit back and lose money over people constantly returning goods. They want the sales to be made and stay made. As stated, it is costly to them to have to accept so many returned goods.

Retailers are now tracking those that return goods, and compiling that information.

There is a database called The Retail Equation, that now gathers, tracks, and can compile reports based on returns and other information.

“Return fraud abuse” costs retailers not just millions, but also costs workers jobs.

One manager commented on these returns by saying, “I worked retail as a manager for years and THIS is the reason the prices keep exponentially going up.”

“Businesses are fighting the A-holes that think its ok to buy an air conditioner or gas grill in May/ June and return it in September for full credit.”

“They are also fighting the thieves that target high priced items and return them for store credit gift cards and re-sell them or use gift card trading websites.”
Of course there are those individuals that return items for legitimate reasons, such as not fitting properly, or wrong colour, but fraudulent returns and delivery fraud is a huge business.

shutterstock_143815579Return and Delivery Fraud

Return and delivery fraud, is a billion pound problem and costs retailers and us as consumers plenty.

These are criminal actions, not the action of someone returning an item for a size issue or not liking it. These forms of fraud are planned out, and in some instances, have the help of an employee of the store or shop.

There are many types of return fraud, according to Wikipedia:

* Wardrobing or renting: Purchasing merchandise for short-term use with the intent to return the item, such as a dress for a special occasion, a video camera for graduations and weddings or a big-screen television for the Super Bowl.

* Returning stolen merchandise: Shoplifting with the objective to return the item(s) for full price, plus any sales tax.

* Receipt fraud: Utilizing reused, stolen or falsified receipts to return merchandise for profit. Alternatively, returning goods purchased on sale or from a different store at a lower price with the intention of profiting from the difference.

* e-Receipt fraud: Utilizing e-receipts issued when purchasing goods online, but returning them in store, to return merchandise for profit. A variation of the receipt fraud using the e-receipts.

* Employee fraud: Assistance from employees to return stolen goods for full retail price.

* Price switching: Placing higher priced labels on merchandise with the intention of returning the item(s) at a higher price than purchase.

* Price arbitrage: Purchasing differently priced, but similar-looking merchandise and returning the cheaper item as the expensive one.

* Switch fraud: Purchasing a working item, and returning a damaged or defective identical item that was already owned.

* Cross-retailer return: Returning or exchanging an item purchased at another retailer (usually at a lower price) for cash, store credit or a similar, higher-priced item at another retailer.

Delivery fraud is a different animal, but it may take on some aspects of return fraud, such as a stolen item that was to be delivered, is returned for cash.

Examples of delivery fraud are:

* Claiming an item did not arrive, or arrived damaged and requesting a new one.

* Parcels may be stolen or misplaced

* Using legitimate details, an order is placed with the intent to “intercept the parcel”.

* Using stolen details, an order is placed to be picked up in-store by the thief.

* A purchase is used for a period of time then returned, or a stolen item is returned.

* A new item is purchased and an older damaged item is returned.

Years ago I had a package sent to me, and upon its arrival it felt very light. It was light for a reason, there was nothing in the parcel. The item I had purchased had been stolen out of the parcel, and the package resealed….with the delivery company’s own sealing tape! The tape had their name on it

When I contacted the delivery company the representative I spoke with was very upfront and stated they had problems with thieves and stealing at their own depots where the packages are sorted.

It is easy to see now how returning goods and delivery fraud can have a negative affect on a business.

,When I make a purchase, in most instances it is a well researched and thought out process. I rarely make any impulse purchases, and 90.5% of the time shop from a list. I make lists for everything

This article by Jon Emge was syndicated by the Personal Finance Syndication Network.

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