Young consumers are always looking for ways to save money, and some have found loopholes in retail policies to do just that. Practices like wardrobing and “digital shoplifting” have become popular among Gen Z and millennials, but they are causing significant harm to retailers’ bottom lines. In response, brands are implementing stricter return policies and fees to combat these issues.
Wardrobing, the practice of buying items with the intention of returning them after wearing them once, has become increasingly common. According to Michael Yamartino, CEO of Route, returns are a significant cost for brands, and when abused, they can make a brand unsustainable. This behavior not only impacts the financial health of retailers but also contributes to the environmental impact of excess returns.
On the other hand, “digital shoplifting” involves consumers falsely claiming that they did not receive an item or that it was stolen, in order to receive a refund while keeping the product. This practice has been highlighted in reports by Sift and Socure, with about half of Gen Z and millennial respondents who earn over $100,000 a year admitting to digitally shoplifting. The rise of digital shoplifting can be attributed to influencers promoting it as a money-saving hack, coupled with lenient refund policies from merchants.
Returns are a headache for retailers, as they involve transporting products back to warehouses, assessing their condition, issuing refunds, and potentially disposing of returned items. The National Retail Federation and Happy Returns projected that returns in the US would amount to $890 billion in 2024. Serial returners, who send back goods worth billions of dollars each year, are a significant contributor to this issue.
To combat these practices, some brands have started implementing measures such as adding tags to items to prevent returns after wear, or charging customers for excessive returns. Asos, for example, has restricted orders for customers who return items too frequently and deducts a fee from refunds for regular returners. Other retailers like Oh Polly, Zara, and PrettyLittleThing have also cracked down on repeat refunders.
Finding a balance between accommodating genuine customer needs and preventing abuse of return policies is crucial for retailers. Companies like Route are helping brands create customer profiles to distinguish loyal customers from potential abusers. By utilizing data and implementing upfront fees for returns, brands can protect themselves from the rising costs of returns programs.
In conclusion, while young consumers may be looking to save money through loopholes like wardrobing and digital shoplifting, these practices have significant consequences for retailers. By enforcing stricter policies and fees, brands are taking steps to address these issues and protect their businesses. It is essential for consumers to be mindful of their shopping habits and consider the impact of their actions on the retail industry as a whole.
