UT Professor: Unethical Returns Could Cost Retailers Billions

Have you ever purchased a dress for that special holiday occasion, only to return it with the tags still on the next day? Many people do, and it’s costing the retail industry billions.

Dr. Ronald Kuntze, assistant professor of marketing at The University of Tampa and an expert on unethical returns, said retailers are caught between a rock and hard place.

“On one hand, they all aspire to the customer-centric ideal of the Nordstrom return policy – trusting and caring for their customers to the highest degree – mimicking their ‘no questions asked’ policy,” he said.

On the other, he added, a significant percentage of customers, nearly 20 percent according to his own research, regularly practice ‘deshopping,’ or the unethical returning of perfectly good merchandise after it has been used. His research shows that as many as 48 percent of American consumers no longer feel that this practice is morally wrong or unethical.

“Some blame the retailer for high prices, or falsely believe the retailer will simply back-charge the vendor for the merchandise,” Kuntze said. “Many also believe that if they only use the item for a special occasion, or only commit the crime once in their life, that it is ultimately a ‘forgiveable sin.'”

Finally, Kuntze says, some believe that if ‘society’ forces them to dress up for a special occasion, or even if friends demand them to wear designer clothes to be ‘cool,’ it is their right to unethically buy and then return merchandise at will.

This is a significant, and significantly growing phenomenon, particularly with younger and, surprisingly, wealthier people.

“Retailers need to rethink their strategies for dealing with these consumers because not only are they behaving as criminals and costing them billions, many of them are their best customers, and may be their core market in the future, particularly if they can get them to mend their ways,” Kuntze said.

Retailers could lose up to $3.7 billion to return fraud this holiday season, according to a survey by the National Retail Federation.

Kuntze has worked extensively in retail, both as a consultant, retailing specialist and a market research executive at Kmart Corp.’s International Headquarters. He, as well as coauthors from Northern Illinois University and the University of Texas at Tyler, has been extensively published internationally regarding this particular phenomenon.

Kuntze can be reached at rkuntze@ut.edu.

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