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One Retailer Fights Back over Return Fraud

Returns are a major hassle for retailers and can be costly, and it’s also an area of concern due to fraud. Last year, according to NRF’s Return Fraud survey, retailers estimated they would lose $2.9 billion due to return fraud during the 2012 holiday season. It also found 65 percent of retailers surveyed had experienced a type of return fraud called “wardrobing,” which refers to returns of used, non-defective merchandise by customers.

One major retailer is doing something about the problem. Bloomingdale’s began a new practice earlier this year to help it fight return fraud. The retailer attaches large hard-to-conceal plastic tags to dresses that cost more than $150 – once the tag is removed, the garment cannot be returned.

Here’s how Bloomingdale’s describes the policy on its website:

“Certain dresses will be delivered with a Bloomingdale’s b-tag attached. Once the b-tag is removed, merchandise cannot be returned. To determine whether a dress you would like to purchase will be tagged, go to the product page and review the details tab below the image. If an item is going to be tagged, we will alert you there.”

It goes on to say it won’t accept a return of merchandise that has been worn, washed, damaged, used or altered. Yes, apparently the problem is so bad that it actually has to spell out that you cannot have an article of clothing altered and then return it for a refund.

Online sellers are not immune from the problem, and eBay sellers are particularly vulnerable to return fraud, since buyers can threaten to leave negative feedback if sellers complain.

So when eBay sent out an email telling sellers that “eBay Buyer Protection” would soon become “eBay Money Back Guarantee,” it wasn’t surprising some expressed concern. Although eBay says it’s a policy name change only – “The current eBay Buyer Protection policy and claims process is not changing, which means it doesn’t affect the way you sell on eBay” – some are concerned that buyers will believe it gives them carte blanche to ignore sellers’ individual policies and instead rely on eBay’s promise of complete satisfaction.

How big of a problem is returns on the eBay platform? Let us know what you think on the EcommerceBytes Blog.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.