7 On Your Side

Companies crack down on customers' returns

Monday, December 26, 2011

You may have been among them -- one of the countless people descending on malls this Monday to return or exchange gifts, but not everyone was successful. Seven On Your Side has this word about a return policy crackdown.

Companies say they lose billions to process returned merchandise. One customer found out the hard way about the crackdown on returns is working.

"It made me feel like I was a criminal," said Simone of Lafayette.

That's how she felt when Best Buy questioned her about a recent return. She says the retailer embarrassed her so much, she didn't want her full name used for this report.

"A notification error came up notifying me that I couldn't return or exchange anything within 90 days," said Simone.

The retailer tells us that's its way of warning customers they may be guilty of excessive returns and the next return could be denied.

"There is fraud basically in returns and apparently, according to the industry, about 1 percent of returns are fraudulent, 99 percent are not," said Jeff Blyskal, a senior editor with Consumer Reports.

Simone is part of that 99 percent, but got caught in the crackdown. One consulting firm estimates that electronic retailers alone spend $16.7 billion a year to process returns. That includes the cost of repairing, reboxing, restocking and reselling returned merchandise. Third party companies like the Retail Equation help retailers keep track.

"Some companies have instituted or have put in place systems that analyze and look for the badges of fraud in returns and of patterns in returns," said Blyskal.

Those companies put together return activity reports like the one done on Simone. The report indicates Simone returns seven items to Best Buy over a two day period, but that may be misleading.

"The sales associate told me that they had a promotion on Best Buy. If you buy it on their credit card, you get a certain amount of points," said Simone.

So she returned a camera, battery, memory card and camera case that she purchased on her American Express card. Then she immediately repurchased it on her Best Buy card so she could get the points. That was listed as four separate returns, thus triggering the warning.

"I'm surprised that sort of thing would turn this up," said Blyskal.

We contacted Best Buy and it agreed to remove the restrictions on Simone's return activities. You should also know that under California law, stores that keep records of returns must prominently display their return policy in the store.

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Tags:
shopping, consumer reports, best buy, 7 on your side, michael finney
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