The Gifts You Can No Longer Return
posted by Daniel Solove
In 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.
Some 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?
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