read

Deshopping - the rise of fraudulent returns

By Dr Annmarie Hanlon
Deshopping has been described as ‘the return of products after they have fulfilled the purpose for which they were borrowed’. ¹ In this article we explore the phenomenon of deshopping, and how it impacts retailers, consumers and the environment. 

Effectively deshopping is where a consumer buys something, such as a dress, wears it to an event and then returns it to the store demanding their money back. They claim that it’s faulty or damaged and they didn’t notice until they wore it.

 

The cost to business of serial returners

While many shoppers feel this is harmless, the estimated costs to business are between £5 billion and £7 billion per year. Cosmopolitan magazine explored the concept of deshopping², trying to show their readers how this malpractice is impacting the high street. The extra expenses retailers face are added to future clothing, creating increased costs for all.

Many of the goods returned are no longer saleable and are dumped. So the massive rise in deshopping also has an impact on the environment, within an ever-increasing amount of worn once clothing ending up in landfill. From an environmental perspective, shoppers are being encouraged to rent or swap clothing for special occasions. This offers greater sustainability as the goods can be worn many times over.

As a result, we have seen the emergence of many new companies such as Rent the Runway, Vinted and others which offer a clothing rental service. It’s not just for special occasions, but for work wear too. Political figures such as Alexandria Ocasio-Cortez, a member of the US congress, proudly states she uses Rent the Runway for her everyday outfits. These clothing rental firms offer designer goods at lower prices, without the need to organise laundry and provide the ‘always new’ wardrobe.

The Cranfield Strategic Marketing Forum recently explored Deshopping: An insight into fraudulent returns behaviours from the consumer and retail perspective in a webinar, where Dr Tamira King shared insights on how some consumers have learned behaviour and know how on when and where to return goods.

One customer group who have learned to formulate strategies and adapt their behaviour to different situations is the serial returner. This is a customer who habitually buys goods, uses them and then returns to get their money back. This is a planned behaviour and part of their strategies include finding the busiest time to return their goods, or becoming very demanding when there is a crowd, causing a disturbance. Retail staff understandably want to avoid negative behaviour in store. So when they are dealing with a complaining customer and faced with a long queue of other customers, they often have little choice but to refund the cost of the goods and accept items which have been worn or purposefully damaged.

Dr King showed examples of clothing that was clearly worn, or deliberately damaged to enable return. Much of this behaviour relates to clothing, but includes homewares too. Imagine the householder who has bought several mini-marquees for an outdoor Covid-safe party. After the event they return the lot within the 30-day period, claiming they are unsuitable.

This undesirable behaviour is governed under legislation such as the Theft Act (1968) but it is often easier for harassed store staff to simply agree with an aggressive customer and return their money.

 

Different stores, different policies

Today’s customers are more informed and aware of their legal rights. Yet further policy changes are taking place in the customers’ favour. For example, in the pandemic many retailers amended their standard conditions, often extending the time boundary beyond the traditional 28 days. This means that some stores are more generous with their returns policies than others. However, in the UK there is a lack of consistency in the returns process between stores, for example:

  • Morrisons allows 30 days.
  • M&S accepts returns for up to 35 days if the item is in its original packaging.
  • Aldi provides a 60-day peace of mind policy, but it must be in ‘saleable condition’.
  • Tesco offers up to 100 days and prefers returns to the original store
  • John Lewis say this depends on the type of item (small, large, jewellery or gift).

But the location inside the store where the return takes place also varies. Some stores have a dedicated returns team, yet others accept returned goods at any till point. For example, one supermarket retailer operated its returns policy based on their operational need rather than customer need. This reduced in-store sales as it was too complex for customers.

Whatever the process, customers, especially serial returners, find ways to get around the policies. They keep the receipts and regularly return goods, especially clothing. They have learned the format of the different stores, so they select a busy time of day, a time when the manager is at lunch, or visit a larger store where they are not recognised.

While UK policies vary, in the USA it's even easier to return goods with their customer-focused approach. Research by Dr King has shown that customers want the process to be easy and often prefer to return in-store rather than through a third party which takes too much time and effort, so it’s likely that the UK will follow the US trend.

 

Online returns

Returns are often easier online as there is no face-to-face interaction where a trained member of staff could delve deeper into the conversation and challenge the customer. However where returns policies are not clear online, or more restrictive, there are more abandoned baskets. So there is a fine balance between encouraging greater genuine purchases and mitigating fraudulent sales. This is an area that Dr King and colleagues are investigating and will be a future event for the Strategic Marketing Forum.

 

What is the future of deshopping?

There are actions retailers can take to counter deshopping. Where the process is a little more complex, such as appointing a dedicated returns staff or checking that the clothing is saleable, the serial returners are less likely to try their luck. Enhanced retail training can also result in a less smooth process as more questions are asked.

Several retailers charge for returns, such as Next which charge £2 and Uniqlo which charge £2.95. The latest is Zara which levy a cost of £1.95 for customers to return goods online, although it’s free if returned in-store. It’s likely other retailers will follow this trend and these small changes may encourage the serial returners to move on and try stores where the process is easier.³

On a societal level, there is the question of fraud and theft. In her research, Dr King advised that these serial returners would never consider shoplifting or other ‘illegal behaviour’ yet their actions are taking goods to use, with the specific intention of not paying, which could be described as a form of fraud or theft.

While the retailers are in competition with each other, none of them want a further increase in deshopping. UK retailers are less likely to share data about their most frequent serial returners and if they did, these types of customers may simply go online.

 

How can retailers address deshopping?

While better staff education for in-store returns along with more complex procedures for online returns will mitigate deshopping, one of the areas retailers should consider is the need for education to reposition this behaviour as being unacceptable. We have seen how previously permitted behaviour, such as smoking in public buildings is no longer acceptable, and we understand the benefit of recycling to reduce landfill.

Perhaps it’s time for a collective campaign by the larger retailers to explain the financial and environmental consequences, before we all pay greater costs due to deshopping.

Here are some steps retailers could take to help deter deshopping:

  • Explain how many items were returned in the previous 12 months.
  • Provide details of why the goods were returned, e.g. ‘changed my mind’.
  • Show images of landfill where goods cannot be reused or repurposed.
  • Encourage influencers working for retailers show examples of repurposing, recycling and reusing clothing.

Notes

1 See The management of deshopping and its effects on service: A mass-market case study

² See PressReader.com - Digital Newspaper & Magazine Subscriptions

³ See https://www.retailgazette.co.uk/blog/2022/05/zara-starts-charging-for-online-returns/ https://www.next.co.uk/terms

 


 

Contributors

Dr Annmarie Hanlon - Senior Lecturer Digital and Social Media Marketing, Director of the Strategic Marketing Forum at Cranfield School of Management. Dr Hanlon is an academic and practitioner in strategic digital marketing and the application of social media for business. Her PhD investigated the benefits and outcomes of social media marketing within organisations for which she was awarded the Mais Scholarship. Originally a graduate in French and Linguistics from University of London, Annmarie studied for the Chartered Institute of Marketing Diploma and won the Worshipful Company of Marketors’ award for the best results worldwide. She gained a Master’s in Business Administration, focusing on marketing planning and achieved a distinction for the Chartered Institute of Marketing’s E-Marketing Award.

Dr Tamira King - Senior Lecturer Strategic Marketing and Sales at Cranfield School of Management.  Tamira has been at Cranfield seven years and she teaches a range of postgraduate modules from Strategic Marketing to Marketing Communications and Retail Omni Channel Management.  She has a Postgraduate Teaching Certificate and is a Fellow of the Academy of Higher Education.  Tamira is experienced in teaching undergraduate and postgraduate modules and post-experience students. Tamira has course management experience and has previously run the MSc in Marketing and MSc Retail Management programmes at Cranfield.  

 

Tags: article, strategic marketing and sales

Cranfield Executive Development