Friday, December 25, 1998

Here's how to have many happy returns

By DAVID ALTANER

Sun-Sentinel, South Florida

I know you haven't even gotten your presents yet, but it's time to talk about returns.

The week between Christmas and New Year's has become a de facto holiday. No one is working, they're too busy spending their gift certificates or returning their gifts for cash or exchange.

Returns are an opportunity, and a problem, for retailers. The opportunity comes when, on the same trip, you return a $25 sweater and buy $100 worth of merchandise.

The headache comes in the costs of dealing with both legitimate and fraudulent returns.

The costs can make a profitable business bleed money. In the catalogue industry, up to 30 percent of all clothing is returned. Imagine selling all these sweaters in December, and then getting a third of them back in January.

Federated Department Stores, parent of Macy's, Burdines and Bloomingdale's, sends 25 million units of merchandise with a value of $820 million back to manufacturers, according to Stores, a magazine published by the National Retail Federation.

Estee Lauder loses $190 million a year in returns and obsolete and damaged merchandise on $4 billion in sales.

And product returns cost the electronics industry $15 billion a year, according to the Consumer Electronics Manufacturers Association. Nearly 11 percent of sales in that industry get returned for a refund.

When Nintendo introduced the hot-selling Super Nintendo system a few years ago, it was actually losing money due to returns. The company was swamped with returns of its 8-bit video game system, which customers now considered obsolete.

Two years ago, the company introduced electronic registration tied to UPC codes, which let Nintendo keep track of whether a potential return was violating the company's 90-day return policy. Returns have fallen from double digits to low single digits, an executive told Stores.

Other retailers are trying to streamline the return process, by either shipping products to central returns handling centers; shipping it directly back to the manufacturer; or discarding it immediately, if that's appropriate.

Retailers have liberal return policies because they want to keep your business.

In its January issue, Consumer Reports sought to test just how liberal some retailers' policies are.

While some retailers have tightened up, the magazine found that others would take back practically everything. Electronics chains have tightened policies after they found customers pulling stunts like buying a camcorder to shoot a wedding on Saturday, then returning it on Monday. Circuit City, for example, has a 15 percent restocking fee.

Some retailers such as Kmart, Home Depot and T.J. Maxx are directing shoppers to a central counter, where employees can become specialists in returns.

But in general, Consumer Reports found retailers to be extremely cooperative, even when the magazine's shoppers ignored the rules.

It found most retailers accepted returned merchandise with a receipt three days after return deadlines. Most, except those accepting returned software, accepted returns without the original packaging. The magazine was able to return half-empty perfume bottles and polo shirts that had been washed several times, but again, it had trouble returning opened software. Most of the stores even accepted merchandise that had been purchased elsewhere.

The biggest problem came when the magazine tried to bring back items without receipts. The shoppers were often either rebuffed or offered store credit instead of cash.

And here's a secret for catalogue shoppers: One of five catalogue companies will pay for shipping to return an item, according to Catalog Age. But you need to know to ask.

Finally, here's some shopping tips:

--The most important rule: Keep your receipt. Although many retailers will take returns without a receipt, without it, they might only give credit for the lowest sale price within the last 30 days. If you're giving a gift, you might ask for a gift receipt or slip, which provides all the information necessary for a return, without the sales price.

--Check the return policy before you buy. It should be prominently displayed in the store, or on the back of the receipt.

--Don't cut off tags or throw away packages until you're sure you want to keep the item.

--Return the merchandise as soon as possible.

--Be polite. No one wants to go out of their way to help a rude, angry shopper.