Monday, October 7, 2013

The Retail Equation, revisited

I noticed an uptick in interest in my April 2012 post about The Retail Equation, a company that is hired by other companies to track returns and report on serial returners. No such system is 100% accurate, and you will encounter a number of false positives (i.e. people who are trying to legitimately return items but who have been flagged by the system as abusers). In my earlier post, I suggested the following:

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.

I tried to see if The Retail Equation has been in the news lately, but all that I could find was a brief mention in a BusinessWeek article about "wardrobing" (buying a piece of clothing for an event, and then returning it for a refund after the event if over):

About 70 percent of retailers now require an ID for a return without a receipt, Hayes says, and an increasing number won’t accept a return without a receipt. Stores operated by L Brands’ (LTD) Victoria’s Secret and Bath & Body Works chains, are using return databases such as the one offered by consultant the Retail Equation to track patterns to identify customers whose continual returns are suspicious; they’ll then be refused future return privileges. Hayes says others are exploring such loss-prevention technologies as those developed by SmartWater CSI, which rely on applying code-laced liquids to valuable products; a merchant can then use ultraviolet light to view the code and verify the authenticity of a purchase.
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