Eliminate the Practice of Wardrobing in Your Store | Retail from AllBusiness.com
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Eliminate the Practice of Wardrobing in Your Store

Return fraud cost retailers nearly $11 billion last year. Here are six ways to avoid becoming part of the statistic.

Mike Kraus
By:  | AllBusiness.com | 
Filed In: Retail
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Well here's a new one to me.  The art of wardrobing.  It's a term coined for shoppers who buy merchandise with the full intent of using it, then returning it for a full refund.  Take a read of the article as the insight is fascinating.

I was astounded to learn that "nearly two-thirds of merchants had items wardrobed in 2007, up from 56 percent the year before, the first year the National Retail Federation (NRF) started tracking the trend," according to the article.

The term wardrobing was chosen (I'm guessing) because it stems from clothing that's been purchased, worn and then returned.  But the article points out that wardrobing has taken on a broader meaning and is now applied to any merchandise that's been used and then returned. 

So how big is wardrobing?  The article points out that "Wardrobers want to rent the things they want or need for free, which amounts to fraud, said Richard Hollinger, a criminology professor at the University of Florida who specializes in retail theft. He said return fraud, which includes wardrobing, fake receipts, and other practices, cost retailers an estimated $10.8 billion last year, up from $9.6 billion in 2006."

THE REAL WORLD RETAILING TAKEAWAY
Wardrobing is an issue for all retailers.  So take action.  If the NRF is tracking it, it's happening to you.

Here are a few tips for curtailing wardrobing.

  1. Post a written return policy.  Your customers need to know you mean business when it comes to returns.  A retailer I worked with a couple years ago went so far as to staple the return policy to every receipt, which dramatically reduced the number of returns they received.  Make sure your return policy includes the various points below so there can be no question about how returns are handled.
  2. Shorten the return period.  Give your customers 30 days to make a return.  No more.  That's plenty of time for someone to make time in their hectic life to get everything done, plus return the product.  And this ensures the merchandise can be restocked and resold without having to mark it down because you're not trying to sell a winter coat in July.
  3. Tighten up the return requirements.  First, make sure the item is returned in its original packaging and that it's in its original condition.  Second, you need to make sure the product came from your store.  So require a receipt.  Always.  If they don't have a receipt, don't dig your heels in - you still need to work to make your customer happy.  Your fallback is to look for your price tag on the goods to ensure it came from your store.   No receipt and no price tag?  Then offer store credit instead of cash for items returned within 30 days, so long as you recognize the product as one that was carried by you.
  4. Inspect merchandise carefully upon return.  Wrinkled, spotted, stained, soiled, smelly, seal broken, opened, put back together wrong - there are so many ways to tell if an item has been used or worn.  Assess the item and then employ the return policy.  It's okay to let your customer know you cannot accept the return merchandise because it's been used and is no longer resellable.  Some will put up a fight (especially those who are wardrobers), but when the item has clearly been used, you can stand your ground).
  5. Alert employees.  Make sure your employees understand the return policy and return process, and they are employing it so you have a standard you're upholding.  There is some subjectivity when it comes to returns because special circumstances will always arise.  The key is to keep the return policy as consistent as possible.
  6. Stop serial returners.  Retail software now allows you track returns by customer.  If you're keeping a customer database which logs purchases by all of your customers, find out how to track returns.  You could potentially even enter it as a keyword in the customer's file.  Any way that you can track returns will help eliminate wardrobers (and send them along to practice their trade elsewhere).

Wardrobing is fraud.  But there's a delicate balance between being too strict with your return policy and doing anything to retain a customer through exemplary customer service.  The key is to use objectivity along with subjectivity to maintain the balance.

How are you balancing returns with great customer service? 

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