I frequently shop at Home Depot. Last year I was remodeling my bathroom and I had some extra parts (unused) and I went to return them. I was mistakenly flagged by Retail Equation and several of the things I was returning were denied. It was extremely frustrating as I had bought thousands of dollars of merchandise and was literally trying to return less than $40 of stuff.
I asked to talk to the store manager, she said there was nothing she could do. To me, the real problem with these systems is that relying on them too much removes the ability for people to provide good customer service.
Fortunately for me, I don't give up so easily. I guessed the email address of the CEO of Home Depot and wrote him. The next day the VP of Loss Prevention called me and then called the store. They let me return my merchandise the next time I tried. ;)
Is this behavior stated explicitly in the store's return policy? If not, that sounds a little like fraud. Its a kind of bait and switch: "Shop with confidence because of our awesome return policy!... except for you, we don't serve 'your kind' here"
This is actually one of the major advantages retail still has over online purchases: returns to online providers require paying for shipping, and the initial shipping costs aren't refunded either. Even with 'free shipping', the cost of shipping + everyone else's returns is just built in.
That said, this seems like just bad policy that leads to the problem. Why should stores allow returns without a receipt or other proof (lookup using credit card)? That seems to be the major issue. If they require proof of purchase, it means they at least aren't refunding theft or products purchased from other stores.
Accepting returns of opened but non-damaged product that can't be resold (eg: missing parts/packaging, obviously used, etc) also seems to be opening themselves up to abuse. Of course, how they handle this has to take into consideration the fact that easy returns are a competitive advantage. This is maybe where the analytics firm can step in, to help identify people that frequently do this.
"You could do things that are inside the posted rules, but if you are violating the intent of the rules, like every item you’re purchasing you’re using and then returning, then at a certain point in time you become not a profitable customer for that retailer,”
Uh...I'm not a lawyer but I really don't think that interpretation of contract law would hold up in court. They offered a contract to purchase an item, the consumer accepted it. Making that contract then reliant on their intent rather than whats written seems a pretty obvious violation of Contra proferentem...am I nuts?
I guess as long as it's implemented well it will never matter to anyone who isn't a cheat.
But as one of countless time-strapped homeowners who can't remember if he needs a 5/8" widget or a 1/2" widget, I frequently buy both and return the extra at a later date. I can only hope I don't get flagged. Frankly it's a big part of the value of shopping at a local retailer.
The amusing thing is that retailers are going to have the data that shows this works. Return fraud will certainly go down.
What they're not going to have is data on the people who choose not to shop at these stores because of this policy, both those who have been incorrectly identified as fraudsters and those who just don't want to bother with the hassle.
So, in order to prevent fraud, companies like Best Buy contract out to companies like Retail Equation to evaluate (and deny) returns. While I can appreciate why they feel it's necessary, this seems like the kind of thing that credit card chargebacks were made to combat.
Great idea, brick and mortar retail. That looks ought to help speed up your Amazon-sponsored demise. Amazon's return policy is so flexible it sets a very high bar for customer service
Amazon does this as well. I don't know why they would this and treat customers this way, especially customers who purchase a lot of things from them, but I do know it's not fraud. It's not even clear how this is legal since the return clause is part of a contract. But they will close your account, prematurely end your Prime membership, and there's nothing you can do about it. Nor can you know when this will happen. That's how much companies like Amazon and Best Buy value their customers. To say they treat them like shit is an understatement.
This could also be "how retailers are going to lose my business"
IMO no-questions asked returns should not be a thing. When you buy something, you should make sure it is the right thing for your need. If it doesn't work as advertised, sure return it. But if you bought something knowing full well that it isn't right for you, you shouldn't be able to return it later.
For example, you buy a pair of shoes. Unless the sole is coming off or it has some other defect, you don't get to return it a week later. When buying online, the return conditions should also include size issues. Sometimes the indicated size does not fit as well as you'd like to and there's no way for you to find that out without wearing it.
I'm more surprised to see that clothing retailers weren't listed. It's incredibly common for "customers" to buy clothes and return them the next day.
We cannot accept your return, Mr. Costanza; this book has been flagged.
This only stops gormless shoppers from making reasonable returns. Everyone else will do a chargeback for credit purchases, or file a complaint in small claims for cash purchases. The moxious will call their credit card company right at the returns desk and ask if they need a photograph of the posted return policy.
Aren't there consumer protection laws against this sort of thing?
Update: I guess it varies state by state http://consumer.findlaw.com/consumer-transactions/customer-r...
Minnesota, where I (and Best Buy Headquarters) are located requires:
"A seller must clearly and conspicuously display written notice of its policy in boldface type of a minimum size of 14 points. If a seller fails this requirement, cash refunds are required of goods that are acceptable for return."
Also, couldn't fraudsters circumvent this entirely by paying in cash?
From the infographic: "returning an item just when a store closes"
Can anyone explain why that specific behavior is a red flag?
There seem to be two scenarios:
1) the third party company blocks sketchy transactions
2) the third party cuts off customers that are deemed 'not profitable' because they return too many items
The first scenario seems perfectly reasonable. The second is evidence of a far more scary direction things could be going in. Fender bender in that rental car? No more Avis rentals. Had to negotiate that medical bill? No more medical care at this facility.
Is anyone else finding a lot of the stuff they buy has minor wear and tear ie probably was a return at some point?
The brand “new” pressure washer I bought was covered with scuff marks.
It sounds like there might be a few false positives in this algorithm, which negatively impacts the retailers from a publicity standpoint.
Also, can someone verify this but I thought that systems like this can be easily manipulated,i.e buying with cash or buying online with PayPal, different credit card etc, as that is PII and companies can't use it to identify you or reject your claims, unless tied to a specific loyalty account.
I dunno if it would help, but I buy everything with credit cards (not directly linked to my bank account) so if I'm having issues returning something the next step would be a dispute via the CC company.
It's amazing how many issues have been cleared up within a few days once the money is on the line.
Sounds like the best way to combat this is to call your credit card and do a charge-back. In that case, the retailer wouldn't even get the merchandise back.
Make that very clear when you are initiating the return and you are being refused.
How Your Returns Are Used Against You at Best Buy, Other Retailers
Best Buy, other chains pay to track customers’ shopping behavior and limit items they can bring back
(Picture of a best buy store with a car parked out front, and a man pushing a cart with a TV towards the entrance)
At Best Buy, returning too many items within a short time can hurt a person’s score, as can returning high-theft items such as digital cameras. Photo: Craig Matthews/The Press of Atlantic City/Associated Press
By Khadeeja Safdar March 13, 2018 5:30 a.m. ET
Every time shoppers return purchases to Best Buy Co., they are tracked by a company that has the power to override the store’s touted policy and refuse to refund their money.
That is because the electronics giant is one of several chains that have hired a service called Retail Equation to score customers’ shopping behavior and impose limits on the amount of merchandise they can return.
Jake Zakhar recently returned three cellphone cases at a Best Buy store in Mission Viejo, Calif., and a salesperson told him he would be banned from making returns and exchanges for a year. The 41-year-old real-estate agent had bought cases in extra colors as gifts for his sons and assumed he could bring back the unused ones within the 15 days stated in the return policy as long as he had a receipt.
The salesperson told him to contact Retail Equation, based in Irvine, Calif., to request his “return activity report,” a history of his return transactions. The report showed only three items—the cellphone cases—totaling $87.43. He asked the firm to lift the ban, but it declined. When he appealed to Best Buy and tweeted his report, the company referred him back to Retail Equation.
“I’m being made to feel like I committed a crime,” said Mr. Zakhar. “When you say habitual returner, I’m thinking 27 videogames and 14 TVs.”
Stores have long used generous return guidelines to lure more customers, but such policies also invite abuse. Retailers estimate 11% of their sales are returned, and of those, 11% are likely fraudulent returns, according to a 2017 survey of 63 retailers by the National Retail Federation. Return fraud or abuse occurs when customers exploit the return process, such as requesting a refund for items they have used, stolen or bought somewhere else.
Amazon.com Inc. and other online players that have made it easy to return items have changed consumer expectations, adding pressure on brick-and-mortar chains. L.L. Bean Inc., which once allowed customers to make returns even years after they purchased items, recently clamped down, citing abuse.
Some retailers monitor return fraud in-house, but Best Buy and others pay Retail Equation to track and score each customer’s return behavior for both in-store and online purchases. The service also works with Home Depot Inc., J.C. Penney Co. , Sephora and Victoria’s Secret. Some retailers use the system only to assess returns made without a receipt.
Best Buy uses Retail Equation to assess all returns, even those made with a receipt. Dozens of shoppers have complained on Twitter, Facebook, Yelp and other online forums that they were prevented from making returns despite following the store’s policy.
Retail Equation said its services are used in 34,000 stores, but declined to provide a full list of its clients. The Wall Street Journal learned of the relationship between some retailers and the firm by reviewing return activity reports from customers.
“We are hired by the retailers to review the returns, look for suspicious situations and issue approvals, warnings or denials,” said Tom Rittman, a marketing vice president at Appriss Inc., a Louisville, Ky., data analytics firm that acquired Retail Equation in 2015.
The company said its system is designed to identify 1% of shoppers whose behaviors mimic return fraud or abuse. Its statisticians and programmers have built a customized algorithm for each retailer that scores customers based on their shopping behavior and then flags people who exceed a certain score. The company said it doesn’t share a person’s data from one retailer with another.
“You could do things that are inside the posted rules, but if you are violating the intent of the rules, like every item you’re purchasing you’re using and then returning, then at a certain point in time you become not a profitable customer for that retailer,” said Mr. Rittman.
At Best Buy, returning too many items within a short time can hurt a person’s score, as can returning high-theft items such as digital cameras. After the Journal contacted Best Buy, the company said it created a dedicated hotline (1-866-764-6979) to help customers who think they were wrongfully banned from making returns.
“On very rare occasions—less than one tenth of one percent of returns—we stop what we believe is a fraudulent return,” said Jeff Haydock, a spokesman for Best Buy. “Fraud is a real problem in retail, but if our systems aren’t as good as they can be, we apologize to anyone inappropriately affected.”
Best Buy CEO Hubert Joly said the company is “looking very seriously at the process and partner around this.”
When a consumer makes a return, details about his or her identity and shopping visit are transmitted to Retail Equation, which then generates a “risk score.” If the score exceeds the threshold specific to the retailer, a salesperson informs the consumer that future returns will be denied and then directs them to Retail Equation to request a return activity report or file a dispute.
It isn’t easy for shoppers to learn their standing before receiving a warning. Retailers typically don’t publicize their relationship with Retail Equation. And even if a customer tracks down his or her return report, it doesn’t include purchase history or other information used to generate a score. The report also doesn’t disclose the actual score or the thresholds for getting barred.
Dave Payne, a 38-year-old public relations professional, said he learned of the system for the first time when he received a warning at a Best Buy in Orlando, Fla. He was returning a digital scale and a router extender, with a receipt for both items.
He said neither Best Buy nor Retail Equation provided a clear explanation for what he did wrong: “Best Buy advertises a 15-day return policy, but they are not advertising that at some point when you’ve crossed an arbitrary line, that policy no longer applies.”
The ban on his account was lifted after he complained to the company’s public-relations department, but he remains upset that his information is being shared with a third party. “It creeps me out.”
Write to Khadeeja Safdar at email@example.com
Can someone summarize? I don't have a WSJ account.
> He asked the firm to lift the ban, but it declined.
That's bad business. I think giving customers a second chance before shutting them out is a better idea.
Retail Equation sounds like they came straight out of Little Britain's "Computer Says No" sketch. https://www.youtube.com/watch?v=AJQ3TM-p2QI
Customer LTV applied to Retail. Amazon can already do it, so this is just catch up.
I thought one had the 'right' to return items in the returns policy... is there fine print allowing them to deny you?
Why does returning an item right before a store closes hurt your score? (per the infographic in the article)
Then we should have access to our records like credit scores and explanations of what they mean.
Anyone have the text of the article lots of us can't actually read?
I log in with the Wall Street Journal account that I finally broke down and paid for and I get: Service temporarily unavailable.