Cabela's Crafty Returns Strategy: How to Cut Off Retail Thieves Without Annoying Customers
It's one of the trickiest spots in any retail store -- the returns desk. How to discourage returns fraud without pissing off customers? Cabela's (CAB) recently discussed a clever new policy that cut returns more than 10 percent, on a National Retail Federation Webinar on fraudulent returns, Security Director News reports.
The NRF reports organized retail fraud is booming, and an estimated $14.8 billion in losses a year happen in returns. So it's a big problem.
Cabela's previously had a generous returns policy on the order of Nordstrom (JWN) or sporting-goods chain REI (wags joke its name stands for "return everything indefinitely"). The new policy is simple: Want to return something at Cabela's? They scan the driver's license of any customer seeking to return an item. This builds a database of who is returning merchandise that allows Cabela's to identify potential thieves who are repeatedly returning goods.
Rather than refusing to return their merchandise, these red-flagged shoppers are given a warning: This is your last time at the returns desk. That's all. Presto, 10.8 percent fewer returns.
"We were pleased to see that warnings, not hard denials, worked," said Bill Napier, Cabela's senior manager for corporate asset protection.
Even this approach isn't without its downside. Some customers see the required ID as an invasion of their privacy. On the consumer-gripe blog ComplaintsBoard, blogger daguilla vents his worry that Cabela's will make nefarious use of the driver-license information they scan and calls the policy "unjustifiable and shameful."
You can't please all the shoppers all the time. But given the epidemic retail theft has become, many retailers are ready to look at new ways to shut down fraudulent returns. Cabela's method keeps its sales staff from having to endure unpleasant confrontations with consumers at the returns counter, and will probably cause many thieves to drop the chain as a target. Hard to argue with the results, especially given the low-key methods used to get them.
Photo via Flickr user jamesmome