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War on 'Wardrobing': Should You Follow Suit?

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By Brett Snider, Esq. on September 20, 2013 12:14 PM

"Wardrobing" is a consumer return scheme that cost the retail industry about $8.8 billion in 2012. But Bloomingdale's has a plan to stop the hemorrhaging over hemlines.

According to The Businesss of Fashion website, the department store giant has a new tactic to curb shoppers who buy, try on, and then return clothing items: refusing to accept items without a black tag.

Should your retail business take up this security trend?

Bloomingdale's Big Black Tag

Wearing and then returning clothing is a fairly common practice, especially in women's fashion. A wardrobing consumer may feel like she's getting a free night or two in a fabulous dress as long as she returns the items in decent condition.

But now Bloomingdale's wants to ice out those freeloaders by placing "conspicuous plastic tags" in hard-to-hide places on garments, ABC News reports. That would make it nearly impossible to wear the garment in public without the wearer tackily broadcasting her return plans.

This new practice of not accepting any items without the clunky 3-inch black plastic tag may separate Bloomingdale's return policy from other stores' more flexible return policies (read: Nordstrom's).

According to American Public Media's Marketplace, a National Retail Federation survey suggested wardrobing affects almost 65 percent of retailers. So what will your business do to prevent it?

Preventing Wardrobing in Your Business

Many stores already employ security features such as exploding ink packs or tags which alert owners that an unsold product has left the store. But what should a business owner do to prevent fraud in retail returns?

Your business could employ a strict "no returns" policy for certain items, but then you risk losing customers -- especially if it is a gift return.

Best Buy and other major retailers have taken to using third-party companies to track customer returns, allowing them to isolate customers who have a pattern of suspicious returns, like frequent wardrobers.

A business owner should also consider consumer protection laws in each store's home state, as failing to conspicuously display or post your return policy may entitle customers to a full cash refund.

If you're unsure about whether a new refund policy is at odds with your business' legal duties, consult an experienced business attorney in your area.

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