The Retail Equation - how many returns are too many returns?

Regardless of whether we buy something online or at a brick-and-mortar store, there's always a chance that we might have second thoughts about the purchase. Maybe we buy clothing that doesn't fit, or media that's defective, or something that has some other problem.

Depending upon the rules of the store in question, you can often return the item and get some type of refund, ranging from a store credit to a cash refund.

Thus, many of us buy something and think that we can return it if there's a problem.

Not so fast, according to an article shared by one of my Facebook friends. In the article, Kevin Hunt of The Bottom Line told the story of Peter Peel. It seems that Peel had returned some items during the Christmas season, as many of us do. Then he bought a Blu-ray disc from Best Buy that proved to be defective. He brought his receipt and the defective disc to the Best Buy, but was asked to provide one other item:

Despite having the receipt, Peel was also asked for his driver's license. (Unlike the "French Connection, however, no one asked if he had ever picked his feet in Poughkeepsie.) After an employee swiped the license, Peel was told the movie-disc return would be accepted but the store would not authorize any other returns or exchanges for 90 days.

It turns out that Best Buy contracts with The Retail Equation, which analyzed Peel's purchasing and return history.

The Retail Equation says its Verify-2 software identifies the 1 percent of consumers whose behavior can be identified as return fraud or abuse. The company, whose software is in 20,000 stores throughout the country, says return fraud ranges from $14.3 billion to $18.4 billion each year.

"Verify-2 enables retailers to rely on objective, verifiable data," says spokeswoman Lisa Mendenhall, "to determine whether a return is valid rather than relying on subjective observations and guesswork by sales clerks. This objectivity ensures that only those with highly suspect return-and-exchange behavior are affected. The vast majority — approximately 99 percent — of returns are accepted."

It does not appear that Peel was committing fraud - for example, buying a big screen TV on the Friday before the Super Bowl and returning it on Monday. Nevertheless, his return activity triggered the "highly suspect" category.

And Peel isn't the only one. There's a thread on the Best Buy forums that was started by BigCTM, a Best Buy Premier Silver Member who fell into the 90 day category after returning a defective $30 Invisible Shield, which was purchased along with an iPad.

After BigCTM posted the comment, two Best Buy "Community Connectors" popped into the thread. For those who automatically assume that a corporate social media presence is the magical thing that can solve all problems, check your assumptions. When a company's underlying policies are the problem, it doesn't matter what your social media people do. BigCTM:

This is honestly a pretty generic reply and does absolutely no good. This is a typical response that honestly favors a outside company (TRE) over its customers. That is exactly what is happening here. Best Buy is basically outsourcing customer service to a firm (TRE) that obviously has no clue about how to treat customers. In the end, it makes Best Buy look bad and is causing Best Buy to lose customers. I know for a fact that I am not the only one who has voiced concern over this issue.

Oh well, I will take my 2500 a year and spend it elsewhere.

According to Kevin Hunt, Peel and BigCTM (and others) can appeal a 90-day return ban decision.

And for those who claim that Best Buy's policies are "illegal," they're stated right in the company's return & exchange policy:

Returns Tracking

When you return or exchange an item in store, we require a valid photo ID. Some of the information from your ID may be stored in a secure database used to track returns and exchanges. Based on return/exchange patterns, some customers will be warned that subsequent purchases will not be eligible for returns or exchanges for 90 days. Customers who are warned or have been denied an exchange/return may request a copy of their Return Activity Report by calling 1-800-652-2331 or by mail at P.O. Box 51373, Irvine, CA 92619-1373. Please be prepared to provide your transaction ID, ID number, full name, address and phone number.

Valid forms of ID accepted are: US, Canadian or Mexican Driver's License, US State ID, Canadian Province ID, Matricula Consular, US Military ID, Passport, US Laser Visa, or US Permanent Resident Card.

And The Retail Equation's services are used by a variety of companies:

A name-brand, nationwide specialty retailer of women’s apparel, lingerie, and personal care products evaluated the impact of The Retail Equation's solutions in two of their largest market areas....

Learn how a home improvement retailer modernized their returns procedures with The Retail Equation’s solutions....

See how a national sporting goods retailer implemented The Retail Equation’s solutions and delivered better service....

Learn how a outdoor outfitter retailer rolled out an entire return optimization program with The Retail Equation’s....

Learn how an auto parts retailer implemented The Retail Equation’s solutions and reduced returns and shrink....

See how returns can lead to new sales as a footwear retailer partners with The Retail Equation....

For the record, The Retail Equation apparently doesn't compare your Best Buy purchases with your lingerie purchases.

TRE (The Retail Equation) states that it does not share its data among retailers. Access to information in their returns database is limited to the consumer, TRE, and the retailer that provided the data to TRE. In other words, TRE does not create a compilation of the shopper’s return activity across all merchants with which that individual shops. If the shopper has returned merchandise to several companies, a merchant will only see the returns for that specific retailer.

So what's the lesson learned? The next time that fast-talking salesperson tries to sell you that electronic device or that lingerie or whatever, simply reply:

It's too risky. I can't commit to a purchase until I receive confirmation from an independent authority that the product has low defect rates and high customer satisfaction. I can't risk losing my money if the product is defective.