Watch Those Merchandise Returns
If you own and operate any sort of retail store, you know that fraudulent returns are an expensive headache. In fact, the U.S retail industry lost about $9.1 billion to $15.9 billion to return fraud and abuse in 2015 (the last year for which data was available), according to a recent survey.* The same insiders say that retail revenue losses cost states between $552 million to $962 million in lost sales taxes.
What You Can Do
Since you don’t want to anger or alienate your regular honest customers, it’s not feasible to prohibit returns. However, it is sensible to create and enforce a strict return policy — one that stops return fraud but allows honest customers to return or exchange legitimate purchases.
Here are some ideas for an effective return policy:
- Always insist on the customer showing ID.
- Do not permit cash returns without a receipt.
- Require that returns on credit card purchases be credited back to the same card.
- Wait 14 days before issuing a credit for purchases paid by personal check.
- Limit the amount of time customers have to make returns.
- Make sure your return policy is visible. If possible, have it printed on every receipt.
* 2015 Consumer Returns in the Retail Industry, The Retail Equation, Inc., 2016
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