Retailers have long dealt with various forms of return fraud, but “wardrobing” is a particularly frustrating trend that spikes during the summer months. This form of retail fraud involves customers purchasing items, using them once or twice, and then returning them for a full refund as if they were never worn or used. The reasons for its increase in summer are numerous, ranging from the season’s numerous social events to the changing consumer habits that warmer weather brings. For retailers, the challenge isn’t just identifying these fraudulent returns, but also figuring out what to do with the items once they are returned.
The Seasonal Surge in ‘Wardrobing’
Summer is a time filled with weddings, vacations, graduations, and other special occasions where people want to look their best. This desire leads to a surge in wardrobe-related purchases. However, not everyone is willing to invest in new clothes for every event. This is where ‘wardrobing’ comes into play—individuals purchase expensive outfits with the intention of returning them after they’ve served their purpose.
Retailers often see a spike in returns of formal wear, swimsuits, and other summer-specific attire during this time. The temporary nature of these purchases, combined with lenient return policies, creates a perfect storm for ‘wardrobing’ to thrive.
Why Retailers Struggle with Wardrobing
Identifying and managing wardrobing fraud presents a significant challenge for retailers. Unlike outright theft, wardrobing is harder to detect because the merchandise is returned in sellable condition, or at least appears to be. Retailers are often hesitant to confront customers or deny returns for fear of damaging their brand’s reputation or alienating genuine shoppers.
The real challenge comes when these items are returned. Even when a product appears unworn, it may not be in a condition to be resold as new. Subtle signs of wear, such as stretched fabric, slight discoloration, or even the psychological discomfort of reselling a returned item, often lead retailers to either discount the product heavily or remove it from sale entirely.
The Cost to Retailers
The financial impact of wardrobing is substantial. Beyond the immediate loss of revenue from refunded purchases, there are hidden costs associated with handling returned merchandise. Inspecting, cleaning, repackaging, or even discarding items that cannot be resold at full price eats into a retailer’s profit margins. Furthermore, the labor costs involved in processing these returns add up quickly, especially during the peak summer season.
Additionally, the secondary market impact is notable. As retailers seek to recoup some of their losses, they may offload returned goods to discount outlets or online resale platforms, which can dilute the brand’s perceived value.
Strategies to Combat Wardrobing
While wardrobing is a difficult problem to eliminate entirely, retailers are increasingly adopting strategies to mitigate its impact:
Stricter Return Policies: Implementing tighter return policies during peak seasons can deter fraudulent returns. For instance, some retailers are shortening the return window or requiring items to be returned in their original packaging with tags still attached.
Restocking Fees: Charging a restocking fee for certain items, especially high-end clothing, can discourage wardrobing by making it less financially attractive.
Return Tracking Systems: Using technology to track customers’ return behaviors allows retailers to identify patterns of fraud. Those flagged as frequent returners may face stricter return conditions.
Enhanced Product Labeling: Some retailers have started using more conspicuous tags that must remain attached for a return to be accepted. This prevents customers from wearing and returning the item without it being obvious.
Customer Education: Retailers can also educate their customers about the negative impact of wardrobing on prices and availability. Transparent communication about return policies can foster a better understanding and potentially reduce fraudulent behaviors.
Conclusion
The rise of wardrobing during the summer months presents a significant challenge for retailers. While the behavior may be driven by a desire to look good for less, the consequences for businesses are serious. As consumers continue to exploit lenient return policies, retailers must balance the need to maintain customer satisfaction with the necessity of protecting their bottom line. By implementing smarter return strategies and educating consumers, retailers can mitigate the impact of wardrobing and ensure that their summer sales aren’t undercut by fraudulent returns.
