The holiday season is coming and consequently retailers must stay out in front and be aware of the types of loss prevention tactics used by unscrupulous people.
Recently I came across a new terminology referred to as Wardrobing. I have known of the practice but not the term. Wardrobing is a form of return fraud. It is the practice of purchasing an item, using it, and then returning it to the store for a refund. It is most often done with expensive clothing – hence the name – but the practice is also common with tools, electronics, and even computers.
To prevent this practice, some stores make certain items, such as wedding dresses or Christmas decorations, nonreturnable. Loss Prevention professionals classify wardrobing as a form of shoplifting.
The return of used, non-defective merchandise is a costly subset of return fraud. Organized retail criminals often use this tactic as well as shoplifting to commit retail crime. Wardrobing is increasing at an alarming rate and as a result has become more damaging every year by the growing number of shoppers buying items online, then returning them to the stores associated with the online brand they had shopped at.
It’s no surprise that the incidents of Wardrobing increases during the holiday season. According to a National Retail Federation survey, retailers expect approximately 11 percent of 2019 winter holiday purchases to be returned, anticipating that 10 percent of those returns to be fraudulent
Wardrobing also occurs during major storms and large sporting events. The unscrupulous consumers come and buy chainsaws, generators etc., then return the items after clean-up claiming that they did not work properly or were defective. The same thing happens around big sporting events when people come in, buy a large-screen TV and then return them after the games.
To counter Wardrobing some stores are tracking customers associated with a high level of returns and adopting a policy of not accepting returns over a certain amount, in effect creating a blacklist of people who return items to physical stores or send online orders back too often.
Watch out for serial returners and make sure to train your staff on this increasing trend.
President/CEO Retail Alliance