Retailers love selling beautiful dresses and garments that cost hundreds of dollars.  What is not so fun is dealing with the return of that product, especially when the product has clearly been worn.  Some retailers ignore obvious signs of wear and accept the product anyway, adhering to the “customer is always right” rule.  But wardrobing, the process of buying clothes and returning them after one or two uses, has increased dramatically in the past few years and is costing retailers $8.8 billion-a-year in return fraud.

In the beginning of the year, Bloomingdale’s implemented a clever strategy to combat wardrobing.  It places 3-inch black plastic tags in highly visible places on a dress costing more than $150.  The customer can try the clothes on at home without disturbing the plastic tag.  However, if a customer wears the dress out, she will want to tear off the black tag, and that makes the dress non-returnable.

Electronics retailers are trying to crackdown on customers who purchase products for short-term use; electronics retailers experience a surge of return fraud after the Superbowl.  Victoria’s Secret stores are compiling lists of customers who are serial returners.  And REI just announced that it was ending its lifetime return policy as many customers took advantage of the leniency.

Implementing a stricter return policy may save retailers money, yet it might alienate honest customers who don’t like change.  However, according to the National Retail Federation, 65% of retailers experience wardrobing and merchants believe that 3.3% of total returns in 2012 were fraudulent.

Discussion Questions:

1. What is wardrobing?

2. What are retailers doing about it?

3. If you were running a retail operation, what would you do about wardrobing?