The Gifts You Can No Longer Return

My-Date-With-Drew.jpgIn the fun and light documentary, My Date With Drew, an average guy named Brian Herzlinger chronicles his attempt to get a date with Drew Barrymore. The documentary was made on a shoestring budget of just $1100, and Brian cut costs by buying a video camera at Circuit City, using it until the 30-day return window was up, and then returning it to the store for his money back.

But Herzlinger’s documentary may one day be notable not for his quest to meet a celebrity but for capturing what might be a quaint piece of nostalgia — the easy and hassle-free ability to return merchandise.

Returning merchandise has become much harder these days. Those unwanted gifts you received this holiday season might be much more difficult to return. According to a WSJ article (don’t bother clicking the link, as the article can’t be accessed without paying a massive fee):

Retailers are further clamping down on return policies, imposing penalty fees and using sophisticated computer databases to flag serial returners trying to game the system. Some are also adding exceptions and caveats to their return policies — for instance, making it particularly hard to return certain kinds of products, such as electronics.


The article continues:

In October, Sears began to impose a “restocking” fee amounting to 15% of the purchase price for some products that are returned used, or with missing parts or manuals. The new policy covers electronics, home appliances, tools, lawn and garden merchandise and automotive items — though not clothing or home furnishings, among other things. . . .

During the holidays, shoppers should ask when the time limit for returning purchases begins. Some stores will extend their 30-day rule for gifts bought early in the holiday-shopping season, so that recipients have time to return gifts after Christmas. But there are exceptions. Best Buy Co., for example, will allow most purchases between Nov. 1 and Dec. 24 to be returned until Jan. 24. But some common gifts, such as digital cameras, must be returned by Jan. 8, and computers still have to be returned within 14 days, no matter when they were purchased.

AngelDemon.jpgSome stores are starting to keep a database of naughty customers. I blogged earlier about the growing trend to separate customers into “angel customers” and “demon customers.” A marketing book suggests that some customers (the angels) are very profitable whereas others (the demons) are not. Demon customers frequently return items or call customer service many times. The book suggests that companies find ways to attract the angels and repel the demons.

According to the WSJ article:

Some stores subscribe to a database called Verify-1, which was created by The Return Exchange, a closely held company whose clients include Sports Authority Inc. and the Express division of Limited Brands Inc. When a customer returns merchandise to any store that uses Verify-1, the cashier swipes the shopper’s driver’s license, which keeps an inventory of any return the shopper has made.

Figuring out exactly what triggers the system is tough, because The Return Exchange is tight-lipped about its criteria for rejection, saying only that it detects fraud through “rules and statistical models.” But if a shopper crosses the database’s line, the return is denied. Customers who are turned down may request, via email, a report from The Return Exchange with their return activity history. . . .

Shoppers can be flagged for returns to multiple stores. So if you frequently shop at a chain that uses the Verify-1 database — the retailer should mention that in its posted return policy — it may be helpful to visit just one store. Salespeople and managers there will begin to recognize you as someone who buys a lot of merchandise and isn’t trying to run a scam.

Are the stores going too far? Chris Hoofnagle writes at EPIC West Blog:

The Return Exchange database skates right on the edge of the Fair Credit Reporting Act’s definition for a consumer reporting database. If Return Exchange is sharing data on consumers across retailers (not just across chains within a certain retailer), the data it issues will be a “consumer report,” and all sorts of rights will kick in to protect shoppers. Until then, a big black box system will have your driver’s license data and make decisions about you with no transparency.

I recall something that Nate Oman recently wrote:

One nice thing about the holiday shopping orgy, however, is that it makes me feel powerful. Everywhere I go, I see one huge corporation after another groveling — literally — for my business. They know that I have options, and this fact gives me courage when I go to the Target exchange desk.

That exchange desk, however, may be much less hospitable this holiday season and in the future — at least for some people, who may find themselves blacklisted. Is this just good business or is it the start of something more troubling?

Related Posts:

1. Solove, Soup for Me at $5 but No Soup for You (Or Maybe at $10) (PrawfsBlawg)

2. Oman, The Power of Shopping

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7 Responses

  1. Chris says:

    It’s just part of the pendulum, once upon a time returns were much more difficult than they are now, and the pendulum swung to make it easy as stores competed for consumers.

    As everyone adopted a very liberal returns policy some consumers have attempted to exploit the benevolence. We are now seeing the pendulum swing the other way.

    If databases are being kept about the practice of returning merchandise then consuemrs should be allowed to challenge the information, I just hope Congress doesn’t step in to force stores to accept all returns given certain criteria because the pendulum will be forever broken.

  2. Dylan says:

    Some retailers are less concerned with the “free rental” camera situation you describe than theft. Shoplifters try to return high dollar items without a receipt. This is a sizable problem at, say, drugstores.

  3. Bruce says:

    Putting aside the data-sharing issues for a second, it seems that “angel customers” such as myself (almost never return, rarely call customer service — although when I am provoked I can get tenacious about it, which I suppose makes me more of a “seraph customer”) may want to have to option to prove our angelic or semi-angelic nature and get a discount — the same way credit reports allow people with good credit to prove their creditworthiness and shed the load of bad-credit-risk free-riders. Granted, there’s a normative difference — defaulting on a debt is a breach of a promise to pay, whereas using customer service or return policies is simply invoking a promise held out by the merchant. Does that normative difference mean that there is a privacy right to mask the amount of customer service you tend to use?

  4. Nate Oman says:

    Dan, I still feel powerful ;->…

  5. Ken Arromdee says:

    If stores are classifying some customers as demon customers because of their legitimate (but expensive) use of promises made by the merchant, then the promises are false advertising, unless their policy says something like “we may refuse a return for any reason even within the 30 day period”. Even then, selling a broken item and refusing to let a customer return it is fraud.

  6. Nate says:

    Of course, there is always Costco. You can return any item (except for computers) bought there at any time, and they don’t ask questions. Or if they do ask questions, they don’t care what the answer is.

    On the other hand, Costco also has the unique ability to terminate the shopping privileges of those people who consistently abuse the policy (like, for instance, returning televisions every six months, so they constantly have the best and brightest).

  7. Mary Ann says:

    Does it not bother anyone to know that a virually unknown company “The Return Exchange” has your Drivers Licence number, date of birth and address. All this info in exchange for the privillage of returning a pair of jeans with a receipt.

    What protection do consumers have against this sensitive information not being miss used, sold or lost, now or at some unknow time in the future.