More and more customers are ordering items online, using or wearing them once or twice, and returning them – this is a type of return fraud called wardrobing.
Wardrobing makes up nearly 70% of all fraudulent returns, which cost the retail industry a total of $23.2 billion a year.
It’s time to take action to prevent your customers from taking advantage of your return policy to get away with wardrobing.
What is Wardrobing?
Wardrobing is a type of return fraud where customers “rent” items by ordering them online, using them once or twice, and returning them for a refund.
37% of shoppers admit to wardrobing apparel, shoes, or accessories. Wardrobing is essentially a fraudulent way that customers use an item temporarily at no cost.
For example, a customer may buy an outfit for a special event, wear it with the tags hidden, then return it the next day and get their money back.
While wardrobing might seem like an innocent thing to do, it’s considered return fraud and is illegal. The problem is there aren’t any real legal consequences, and it can be difficult to tell if someone wore a piece of clothing only once.
Who Does Wardrobing and Why?
Customers may engage in wardrobing for a few different reasons:
- Trying out the item for a short period of time to determine whether or not it truly meets their needs.
- Returning items that were only used once or twice as a means of generating fast cash in the case of a change in economic circumstances.
- Using an item for a one-time special occasion and not wanting to absorb the price of an expensive item.
- Feeling pressure to keep up with fashion trends and not wearing an outfit more than once.
- Enjoying the thrill of getting away with what might be considered a negligible crime.
When tags are attached with safety pins or knotted ribbon, it’s especially easy for customers to remove and reattach them to an item without any evidence of tampering.
Preowned items are also particularly susceptible to wardrobing because they already show existing wear and don’t have tags, so there won’t be any evidence of fraud if returned after use.
No matter the reason for wardrobing, it is illegal and there are various steps you can take to prevent eCommerce wardrobing return fraud.
3 Ways to Prevent Wardrobing
The impact of wardrobing on eCommerce merchants is growing, as online shopping is becoming more popular and customers have more flexibility.
Returned items often aren’t in good enough condition to be resold at full price, and wardrobing adds to the cost of processing returns and of lost sales to non-wardrobing customers.
Wardrobing can be prevented in a number of ways:
1. Establish a Clear Return Policy
Create a clearly-defined eCommerce return policy with terms and requirements designed to minimize the effects of wardrobing, which is a type of return policy abuse.
For example, you can set a limited return window, define specific conditions for product returns, and offer refunds only in the form of store credit instead of a direct refund.
Although a lenient return policy may give your customers peace of mind, it can also expose you to return fraud. Keep this in mind when creating your return policy, and make sure to clearly define your conditions for accepting product returns.
2. Inspect Returned Products
Inspect returned items as soon as possible and don’t issue a refund until you are sure the item was returned legitimately and is not a subject of wardrobing.
When inspecting returned items, avoid letting the tendency to process items quickly affect the effectiveness of your inspection.
There are many ways to tell if an item has been used or worn and is return fraud. An item may be wrinkled, spotted, stained, soiled, smelly, have a broken seal or damaged tag, or put back together wrong.
Assess the returned item and then implement the return policy accordingly. If the item looks fine and can be restocked and resold, go ahead and move forward with the refund or credit.
If the item has clearly been used and isn’t resellable, it’s okay to stand your ground and refuse to accept the return, based on the conditions defined in your return policy, on the grounds that the item was returned as a form of wardrobing fraud.
3. Use Anti-Wardrobing Tags
Anti-wardrobing tags allow customers to try on an item while being specifically designed to be difficult to replace or hide when wearing an item.
Using anti-wardrobing tags is effective in deterring wardrobing return fraud because they are highly visible and extremely difficult to replace once removed. Some of the most popular anti-wardrobing tags include 360 ID and Alpha Shark.
Make it clear in your return policy that the tag must not be tampered with in order for returned products to be eligible for a return.
Protect Your Store Against Wardrobing
Wardrobing has become the largest proportion of return fraud. Stay ahead of the curve by developing and implementing procedures that help you identify and prevent wardrobing, such as updating your return policy, inspecting returned items, and implementing anti-wardrobing tags.
Prevent wardrobing return fraud while delivering a positive and trustworthy customer experience by using a return portal to collect information about return reasons, request photo evidence, and set eligibility conditions.
Step up and take action to protect your eCommerce store from the harmful impact of wardrobing return fraud.