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In
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholes ...
, a product return is the
process A process is a series or set of activities that interact to produce a result; it may occur once-only or be recurrent or periodic. Things called a process include: Business and management * Business process, activities that produce a specific s ...
of a
customer In sales, commerce, and economics, a customer (sometimes known as a Client (business), client, buyer, or purchaser) is the recipient of a Good (economics), good, service (economics), service, product (business), product, or an Intellectual prop ...
taking previously purchased
merchandise Merchandising is any practice which contributes to the sale of Product (business), products ("merch" colloquially) to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative w ...
back to the
retailer Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesal ...
, and in turn receiving a refund in the original form of
payment A payment is the tender of something of value, such as money or its equivalent, by one party (such as a person or company) to another in exchange for goods or services provided by them, or to fulfill a legal obligation or philanthropy desir ...
, exchange.


Overview

Many retailers will accept returns provided that the customer has a
receipt A receipt (also known as a packing list, packing slip, packaging slip, (delivery) docket, shipping list, delivery list, bill of the parcel, Manifest (transportation), manifest, or customer receipt) is a document acknowledging that something h ...
as a proof of purchase, and that certain other conditions, which depend on the retailer's policies, are met. These may include the merchandise being in a certain condition (usually resellable if not defective), no more than a certain amount of time having passed since the purchase, and sometimes that identification be provided (though usually only if a receipt is not provided). In some cases, only exchanges or store credit are offered, again usually only without a receipt, or after an initial refund period has passed.Associated Press,
Retailers cracking down on return fraud: Avoid problems returning unwanted gifts during holiday season
" ''MSNBC'' (Dec . 6, 2006). Some retailers charge a restocking fee for non-defective returned merchandise, but typically only if the
packaging Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a coo ...
has been opened.policy Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an or ...
in a place where it would be visible to the customer prior to purchase. In certain countries, such as
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
consumer rights Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesse ...
dictate that under certain situations consumers have a right to demand a refund. These situations include sales that relied on false or misleading claims, defective
goods In economics, goods are anything that is good, usually in the sense that it provides welfare or utility to someone. Alan V. Deardorff, 2006. ''Terms Of Trade: Glossary of International Economics'', World Scientific. Online version: Deardorffs ...
, and undisclosed conditions of sale. There are various reasons why customers may wish to return merchandise. These include a change of one's mind ( buyer's remorse),
quality Quality may refer to: Concepts *Quality (business), the ''non-inferiority'' or ''superiority'' of something *Quality (philosophy), an attribute or a property *Quality (physics), in response theory *Energy quality, used in various science discipli ...
of the merchandise, personal dissatisfaction, or a mistaken purchase of the wrong product. For
clothing Clothing (also known as clothes, garments, dress, apparel, or attire) is any item worn on a human human body, body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin s ...
or other
size Size in general is the Magnitude (mathematics), magnitude or dimensions of a thing. More specifically, ''geometrical size'' (or ''spatial size'') can refer to three geometrical measures: length, area, or volume. Length can be generalized ...
d items, it may be a lack of a correct fit. Sometimes, there may be a product recall in which the
manufacturer Manufacturing is the creation or Production (economics), production of goods with the help of equipment, Work (human activity), labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary se ...
has requested (or been ordered) that the merchandise be brought back to the store. Also, gift receipts are offered sometimes when an item is purchased for another person, and the recipient can exchange this item for another item of comparable value, or for store credit, often on a
gift card A gift card, also known as a gift certificate in North America, or gift voucher or gift token in the UK, is a prepaid stored-value card, stored-value money card, usually issued by a retailer or bank, to be used as an alternative to cash for pu ...
.


Economic impact

In the US, an estimated 8–10% of in-store sales is returned whereas online sales may result in 25–40% returns. In Asia and Europe, less than 5 percent of purchases are returned. US shoppers returned $396 billion worth of purchases in 2018 – brick-and-mortar and online, according to the National Retail Federation (NRF). To fight high return rates in
e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
, a realistic product visualization is needed. Next to imagery and video content, 3D technology like
augmented reality Augmented reality (AR), also known as mixed reality (MR), is a technology that overlays real-time 3D computer graphics, 3D-rendered computer graphics onto a portion of the real world through a display, such as a handheld device or head-mounted ...
and
virtual reality Virtual reality (VR) is a Simulation, simulated experience that employs 3D near-eye displays and pose tracking to give the user an immersive feel of a virtual world. Applications of virtual reality include entertainment (particularly video gam ...
, but also simply 3D in the browser can enhance the shopping experience and lower return rates. In the UK, Logistics costs for returns is estimated at between £20bn and £60bn per year. Figures show that 33% of retailers had to increase prices to counter rising returns volumes whilst 31% of retailers said managing returns impacts their profits. For some companies the costs of accepting returns amounts to as much as 5% of their annual turnover.


Issues


Fraudulent returns

In the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, various abuses using the return process allegedly cost retailers more than $9 billion annually.Michelle Singletary,
Return Fraud Earns Retailers' Wrath
" ''The Washington Post'' (December 10, 2006): F01. One common practice is the use of the system in order to "borrow" the merchandise at no charge. The customer who engages in this practice purchases the item for temporary use, then returns it when finished. Examples include an article of clothing worn for a single occasion, or a book that is returned after it has been read. This practice is called "wardrobing." Stores such as
Macy's Macy's is an American department store chain founded in 1858 by Rowland Hussey Macy. The first store was located in Manhattan on Sixth Avenue between 13th and 14th Streets, south of the present-day flagship store at Herald Square on West 34 ...
and Ross put large "do not remove" tags on women's dresses to try to defeat this, not accepting returns or exchanges for any items that do not have the tag. Many stores also refuse to refund certain items like
reading Reading is the process of taking in the sense or meaning of symbols, often specifically those of a written language, by means of Visual perception, sight or Somatosensory system, touch. For educators and researchers, reading is a multifacete ...
materials, inflatable airbeds (Target and
Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States and 23 other ...
), and even
portable Portable may refer to: General * Portable building, a manufactured structure that is built off site and moved in upon completion of site and utility work * Portable classroom, a temporary building installed on the grounds of a school to provide a ...
heater Heating, ventilation, and air conditioning (HVAC ) is the use of various technologies to control the temperature, humidity, and purity of the air in an enclosed space. Its goal is to provide thermal comfort and acceptable indoor air quality. ...
s (
Dollar General Dollar General Corporation is an American chain of discount stores headquartered in Goodlettsville, Tennessee. As of January 8, 2024, Dollar General operated 19,643 stores in the contiguous United States and Mexico. The company began in 1939 in ...
). Another problem is when customers legitimately purchase an item, then re-enter the store with the receipt, take an identical item off the shelf, and approach the
customer service Customer service is the assistance and advice provided by a company to those who buy or use its products or services, either in person or remotely. Customer service is often practiced in a way that reflects the strategies and values of a firm, and ...
desk requesting a refund. In the process, they essentially receive the item for free, and may be charged with
shoplifting Shoplifting (also known as shop theft, shop fraud, retail theft, or retail fraud) is the theft of goods from a retail establishment during business hours. The terms ''shoplifting'' and ''shoplifter'' are not usually defined in law, and genera ...
or another similar crime if caught. Others have been reported to print fake receipts which they use to return stolen merchandise for a cash refund. However, this is nearly impossible now that most stores use individually numbered receipts. Scanning the receipt's
barcode A barcode or bar code is a method of representing data in a visual, Machine-readable data, machine-readable form. Initially, barcodes represented data by varying the widths, spacings and sizes of parallel lines. These barcodes, now commonly ref ...
at the
cash register A cash register, sometimes called a till or automated money handling system, is a mechanical or electronic device for registering and calculating transactions at a point of sale. It is usually attached to a Cash register#Cash drawer, drawer fo ...
links legitimate returns to a
database In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and a ...
that validates the original purchase. (Despite this, some stores that have had such systems for years still refuse to accept a
photocopy A photocopier (also called copier or copy machine, and formerly Xerox machine, the generic trademark) is a machine that makes copies of documents and other visual images onto paper or plastic film quickly and cheaply. Most modern photocopiers ...
of a legitimate receipt where the original may have been misplaced, or obscured due to the store's use of cheap thermal paper or very light ink.)


Denying returns

Some retailers have turned to a practice in which customers who return or exchange items excessively (beyond the guidelines set by a retailer) may be prevented from making a return or exchange with that particular company. In the United States, a company called The Retail Equation (formerly The Return Exchange) collects data from participating retailers via a swipe of a
driver's license A driver's license, driving licence, or driving permit is a legal authorization, or the official document confirming such an authorization, for a specific individual to operate one or more types of motorized vehicles—such as motorcycles, ca ...
, or most other types of government issued photo identification. The information found on the license is collected into a
database In computing, a database is an organized collection of data or a type of data store based on the use of a database management system (DBMS), the software that interacts with end users, applications, and the database itself to capture and a ...
, and other stores operated by that particular retail company can use this information to deny a return. This system can be used to prevent various problems, such as return fraud. These controversial practices of collecting information have been addressed by privacy rights advocates and spurred a movement for boycotting chains that collect consumers' private information and allow third party sources to use it. The request of presenting a form of identification for returning products and collecting the information has stirred controversy, especially if the customer that purchased the product was a minor (under the age of 18). Immigrant rights groups have voiced serious concern over the practice since most illegal immigrants don't have a state ID or a drivers license and this practice could potentially be used to discriminate against them, however, all of the stores that are associated with The Retail Equation, accepts all types of government issued photo identification, including, but not limited to, driver's licences (regardless of issuing state),
state identification card In the United States, identity documents are typically the U.S. state, state-issued driver's license or identity card, while also the Social Security card (or just the Social Security number) and the United States passport card may serve as natio ...
(regardless of issuing state),
passports A passport is an official travel document issued by a government that certifies a person's identity and nationality for international travel. A passport allows its bearer to enter and temporarily reside in a foreign country, access local aid ...
(regardless of issuing country), Mexican matricula consular documents, concealed carry firearm permits (regardless of issuing state), and
uniformed services Uniformed services is an abstract term that are generally bodies of people in employment of a state who wear a distinct uniform that differentiates them from the public and private sector. Their purpose is to foster the equality, security, saf ...
identification cards.


Legislation

Legislation exists in various parts of the world giving consumers the right to return goods in as-supplied condition for a full refund, within a set period of time, known as a cooling-off period. Sometimes this legislation only applies to distance sales such as
e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
.


See also

*
Cooling-off period (consumer rights) In consumer rights legislation and practice, a cooling-off period is a period of time following a purchase when the purchaser may choose to cancel a purchase, and returning, return goods which have been supplied, for any reason, and obtain a full r ...
* Lemon law * Money back guarantee * Package redirection scam * Return merchandise authorization * Reverse logistics *
Warranty In law, a warranty is an expressed or implied promise or assurance of some kind. The term's meaning varies across legal subjects. In property law, it refers to a covenant by the grantor of a deed. In insurance law, it refers to a promise by the ...


References


External links


The Retail Equation homepage
describes details about the agency and returning {{Authority control Supply chain management