Summertime brings to mind light, cotton clothing, and swimsuits. However, for retailers, it also means a significant rise in a particular type of retail fraud called, “wardrobing.” And chances are you or someone you know has done it…
Wardrobing is when consumers buy items — usually clothing — using them with the tags on, then returning them. It seems harmless enough and it’s not illegal by any means. (It certainly isn’t a major, organized retail crime.)
FURTHER, A RETURN SOFTWARE COMPANY OPTORO SURVEY REVEALED THAT 30% OF SHOPPERS HAVE “WARDROBED.”
Nevertheless, there are real consequences to these excessive returns…
Especially when it ramps up during the beach and cruise season.
Why Wardrobing is a HUGE Problem for Retailers
Optoro’s CEO, Amena Ali stated to CNBC that the Summer spike in returns highlights the issues it brings stores.
“DURING THE SUMMER AND CRUISE SEASON, FROM JULY TO SEPTEMBER, WE SEE WARDROBING AND OVERALL RETURN RATES SPIKE BY TWO TO THREE TIMES, WITH SWIMWEAR ALONE MAKING UP BETWEEN 5% AND 15% OF RETURNS. THIS HIGHLIGHTS THE FINE LINE BETWEEN HABITUAL RETURNERS AND FRAUDSTERS.”
The phrase, “time is money,” is particularly relevant to the challenges wardrobing creates for vendors.
It goes like this…
The items are returned after being used which presents two paths for the products:
- By the time they are cleaned and able to be resold, it is late in the retail cycle. Therefore, the merchandise has to be discounted.
- Or, these pieces are found to be too damaged for resale.
Either way, the company loses money. And while you might not feel bad for them, it affects us as consumers as well…
How Habitual Wardrobers Cause EVERYONE to Lose
As a result of elevated levels of wardrobing, companies have had to take action and put in stricter store policies.
UNFORTUNATELY, IT HURTS THOSE WHO PLAY BY THE RULES THE MOST.
Examples of these new restrictions include shorter return time frames and in-store return is a requirement.
Still, it is hard to determine a real solution to this problem for the time being…
The prices of goods go up. Yet consumers feel they must maintain a certain lifestyle.
As to what will give first, time will tell.
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
