The longest line on a busy Saturday afternoon in a celebrated New York department store is at the returns desk: bad news in these troubling times when every dime counts. First in line is 18-year old Jayne, decked out in the latest Ugg boots and designer jeans. Jayne is returning the dress she bought on Thursday and wore on Friday.
Next in line Dorothy Dodds, an elegant octogenarian, who is returning an expensive evening dress which she recently wore at two black-tie dinners on her voyage from England on Cunard's Queen Mary 2. Apparently, it was inexplicably tight. Having had her return garment accepted, Dorothy quickly secretes the $450 of store vouchers she has received in her recently-purchased crocodile skinned shoulder bag.
Further back in the line are Natasha and her baby son Louis. Natasha is returning a pashmina, worn recently at a cousin's wedding. She gives a broad grin and a knowing wink to the person behind her, as a refund of $225 is credited to her store credit card. She also receives a goodwill discount voucher of 10% as part of the store's customer loyalty initiative.
Meanwhile, in the store's security office two teenagers who have been apprehended for shop-lifting stand forlornly. But have they really committed a worse crime than the likes of Jayne, Dorothy or Natasha?
Welcome to the growing community of deshoppers, whose activities are costing U. S. retailers an estimated $16 billion a year. It is a significant part of the broader problem of retail crime which threatens the profitability and competitiveness of stores, products and retail businesses worldwide.
Over the last ten years we have been researching deshopping in Britain through two mass market retail case studies and surveys of 150 independent retailers and over 500 consumers. What we've found is disturbing:
- Deshopping seems to be addictive and a growing number of people are serial offenders. What's more, they pass on the dark arts to their family and friends.
- Increasingly, deshoppers are operating in packs when returning goods, suggesting that the activity is becoming organized.
- All types of shops are vulnerable: Small ones because they are perceived to have fewer defenses and shop assistants are more anxious to please and large chain stores because they provide more anonymity (you can buy in one location and return in another, for example).
Some corporations are responding by requiring stricter return criteria. This can be helpful but indiscriminately applied it can also create offense with customers making legitimate returns. A more nuanced approach to customer returns is required, and it should work on at least four fronts:
- Training. Managing returns effectively and fairly requires a dedicated, trained staff capable of distinguishing deshoppers from bona fide customers.
- Communication. Retailers should be up-front about the problem. By acknowledging the problem in customer and staff communications the chances of abusing genuine customers can be reduced and deshoppers may even be shamed into changing their minds before making a return.
- Comprehensive, consistent, and manageable policies and processes. Remember that unethical shoppers are more likely to succeed undetected if there is opportunity and weaknesses among internal controls.
- Watchfulness. Surveillance technology can help you identify serial unethical shoppers. Of course, it is imperative to measure the effectiveness of these tools and the effect they have on consumer behavior.
As retailers look to an uncertain future, they need to commit to making policy changes. Shaving just a small amount of shrinkage could make a substantial improvement to their bottom line.