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Abuse on returns registers with stores

Chains are scaling back their generous policies in an effort to thwart dishonest consumers.

December 26, 2007|Molly Selvin | Times Staff Writer

Memo to serial returners: They're on to you.

Liberal rules that allowed customers to return just about anything just about anytime are no more at many retail chains across the country. It's a classic case of abuse by a few spoiling the fun for everyone.

Costco Wholesale Corp., for instance, had one of the most generous policies around until it wised up to the occasional scoundrel who would "upgrade" a consumer electronic purchase, said Richard Galanti, chief financial officer for the Issaquah, Wash.-based warehouse chain.

For a chain with hundreds of stores, occasional abuse can add up. Galanti said the no-questions-asked policy was responsible for losses of more than $100 million a year -- and noted that besides computers and MP3 players, people have been known to bring back containers of cole slaw pulled from their refrigerators and half-eaten bags of potato chips.

Now customers can't get their money back on electronic products if more than three months have passed. "We went from infinity to 90 days," Galanti said.

Kmart, Lowe's Cos. and Wal-Mart Stores Inc. have installed computer systems that monitor how often individual customers return things and, as Consumer Reports magazine warned, may stop accepting returns from buy-and-bring-back addicts.

Amazon.com will not accept returns of items that are missing the serial number or UPC square on the box, Consumer Reports noted, and Best Buy Co. and Circuit City Stores Inc. charge a 15% restocking fee on some electronic items if the box has been opened, while Toys R Us Inc. has begun requiring a dated sales or gift receipt for refunds and exchanges.

For Costco, the introduction of the video iPod in 2004 brought the returns problem home. The chain sold more than 25,000 in the product's first week -- and customers returned more than 12,000 during the same period, most of them older models. "For the same price or better, they got a better iPod with a screen," Galanti recalled.

A San Diego accountant who asked that his name not be printed said he took advantage of Costco's openhandedness for years, purchasing and then returning several high-definition televisions, each time getting a better set at a lower price as the technology improved.

"I stopped buying from Circuit City and Best Buy because they have limited return policies," he said, recalling how he once waited in a Costco returns line behind someone with a barbecue grill that was blackened from use. The store took it back.

Theft, particularly of clothing, has pushed some retailers to clamp down. Stolen items are fenced over the Internet or on the street at a deep discount, said Joe LaRocca, vice president of loss prevention for the National Retail Federation, and the most brazen crooks bring merchandise back to the store demanding cash.

The overwhelming majority of returners are sincere, he said, simply having changed their minds. Most stores will gladly fix or replace a defective product. And some -- Nordstrom Inc., for example -- accept most items with few explicit limits. Others have loosened their usual return policies for the holiday season. Best Buy normally allows returns within 30 days, but customers have until Jan. 31, 2008, to return things purchased from Nov. 1 to Dec. 24.

About 9% of all merchandise sold is returned, according to the retail federation. This year that will total more than $10 billion, with clothing and electronic items accounting for most of that amount.

For all the honest people who didn't like the way those jeans fit when they got them home, there are still too many exploiters. In extreme cases, stores reluctantly "fire the customer," said David Ng, the service manager at Best Buy in West Los Angeles. He recalled telling a chronically dissatisfied customer when he worked for another chain that the store didn't want his business anymore. "But that's rare," he said.

Roy Blume, Shoe Pavilion's regional vice president in Southern California, said the chain holds firm to its policy: Your money will be refunded if you bring a pair of shoes back within 30 days of a purchase and you have a receipt, the shoes are unworn and are in the original box.

The policy is often tested. One women came back with a $9.99 pair of shoes three months after she bought them, demanding a refund because, well, they looked as if someone had been walking in them for three months, he said. "Basically, she wanted us to give her a free pair of shoes," Blume said.

Another customer was so indignant about being refused a refund that she threatened to call her friend the mayor. Blume wouldn't budge.

"That's fine," he told her, "but the mayor didn't build this store."

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molly.selvin@latimes.com

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