retail news in context, analysis with attitude

MNB took note yesterday of a Bloomberg BusinessWeek report on how a National Retail Federation (NRF) survey suggests that "return fraud cost retailers an estimated $8.9 billion in 2012, with nearly 30 percent occurring during the holiday season alone. Overall, the survey shows that about 4.6 percent of holiday returns are fraudulent ... Of the 60 retailers surveyed, 96.5 percent reported being ripped off by criminals who collected refunds for stolen items this year, and almost half said they’d received counterfeit receipts. Nearly two-thirds of the retailers said customers had returned items they’d worn or used."

My comment:

I have to admit to being surprised that one survey said that while 10 percent of people admitted to buying something, wearing it and then returning it, 25 percent of people say they know people who have done it.


It is things like this that make me worry about society and the tearing of our cultural and ethical fabric. It is just plain and consciously wrong, and yet people do it.

MNB user Kathleen Whelen wrote:

My aunt used to work in the ‘Dress Salon’ department of Saks Fifth Ave in White Plains.  Patrons thought nothing of buying extremely expensive outfits, wearing them to a gala or party, and then returning them.  And not once, but over and over!  No one said ‘boo’ to them because they dropped a lot of $$ on the garden-variety overpriced stuff.

One MNB user responded:

Does that 10% of people who admit to returning worn items include folks who bought a pair of shoes, wore them once and returned them because they were remnants of the Spanish Inquisition? I write this nursing a blister caused by shoes that were comfortable in the store but somehow morphed in torture implements in my closet. I think I'm about to become a statistic.

I don't think so ... because returning those shoes does not constitute fraud.

From another reader:

The fraud committed by the consumer certainly is large and unethical however the story doesn’t mention the fraud committed by the retailers to the manufacturers.
And from another:

Give me a break. Does anyone in the vendor community believe that retailers suffer the losses caused by return fraud. In my over thirty years of experience retailers deduct all returns off invoices and make you challenge their claims.

I find these last couple of emails fascinating.

I have no doubt that some retailers commit some version of fraud against manufacturers when it comes to various links in the supply chain.

But that does not justify consumer fraud against retailers.

It is a cliche, but two wrongs don't make a right.

These responses strike me as a rationalization.

Of course, remember this exchange from The Big Chill...

Jeff Goldblum: "I don't know anyone who could get through the day without two or three juicy rationalizations. They're more important than sex."

Tom Berenger: "Ah, come on. Nothing's more important than sex."

Goldblum: "Oh yeah? Ever gone a week without a rationalization?"

On the broader subject of competition, MNB user Frederic Arnal writes:

Adding to the squeeze being felt by small and e-retailers is the across the board increases being taken every January by the major carriers.  UPS just raised rates more than 5%.  Five years ago, the average ground shipping cost for a normal package was $7.95.  Today it’s more than $12.95.  Free shipping means we must absorb these costs.  And, adding to injury, large corporations get much more favorable rates in their shipping contracts because of their tremendous volume.  So, priority rates are totally out of balance for the small player making them even more uncompetitive.

You're right.

Life ain't fair.
KC's View: