Retailers Expecting Post-Super Bowl TV Returns
Football fans have created quite the loophole in how they plan to watch the big game on Sunday. Due to many lenient return policies, consumers can “purchase” a state-of-the-art TV, impress partygoers, and then return the TV on Monday morning for a full refund before it ever appears on a credit card statement.
This particular type of retail fraud is considered “wardrobing” – the practice of returning non-defective merchandise, despite its use.
"It's funny how it's taken over. It's showing off, it's putting a big old TV up on your wall for your Super Bowl party whether you can afford it or not," Sean Cleland, vice president of mobile for liquidation company B-Stock, told CBS.
The Super Bowl conveniently falls right after January’s Consumer Electronic Show, where new products are showcased and expected to come out around summertime. Retailers want to get the latest models on shelves and get the older models out the door, which makes the Super Bowl an ideal time to promote sales and markdowns.
But this doesn’t really help their cause.
For the past three years, TV returns have jumped 20 percent from the fourth quarter (October-December) to the first quarter (January-March; aka Super Bowl season) bringing the overall return rate to about 25 percent during the first three months of the year, B-Stock reports.
"It's tricky for retailers because they're competing with the online sellers of the world who have liberal, lax return policies that force them into providing a similar customer experience," Cleland said. "It has created a glut of returns post-Super Bowl," he said.
That glut of returns is not cheap. In fact, returns are considered lost sales to retailers. Profit and margin percentages automatically take a hit when retailers are forced to sell open-boxed goods. Not to mention, inspecting and restocking items drive up labor costs.
Consumers might not see what the big deal is in returning a perfectly good TV; however, they can expect to face some repercussions if this habit keeps up.
Retailers are actually investing in companies like The Retail Equation that track consumer behavior to try to catch these individuals and deny them the right to return merchandise.
"It's a relatively new phenomenon -- the process of banning people from making returns," said Robert Moraca, vice president of loss prevention for the National Retail Federation. "You've got to be really outside the norm to get onto that list."
It seems strange that someone could be actually become banned from making a return, but for retailers, this tactic might work to protect them from annual Super Bowl wardrobing.