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How to prevent wardrobing in your business?

female entrepreneur using WeSupply policy enforcer to combat wardrobing

As a retailer, the consequences of wardrobing can be a nightmare to your bottom line and brand reputation. But what if there were strategies to prevent wardrobing and minimize this growing trend? In this blog post, we’ll dive deep into the world of wardrobing, explore its effects on businesses, and discuss various tactics to mitigate its impact and protect your future profits.

Key Takeaways

  • Retailers must recognize the nuances of wardrobing return fraud and its growth factors to protect their businesses from this deceptive practice.

  • Retailers face direct costs due to wardrobing, including financial losses, environmental damage, and reputational harm.

  • To combat wardrobing effectively retailers should implement strategies such as establishing clear return policies, inspecting items thoroughly with anti-wardrobing tags and offering store credit instead of cash refunds.

  • WeSupply offers a streamlined solution to returns management. Eliminate return abuse and lost package issues with real-time tracking. Our system empowers customers to handle returns while you maintain oversight. Combined with our Return Policy Enforcer’s simple eligibility check, we ensure an efficient returns process, enhancing the experience for genuine customers and mitigating unwarranted behavior.

Introduction: The Ecommerce Returns Conundrum and the Challenge of Wardrobing.

Online shopping has revolutionized the way we buy, making it easier than ever to purchase items from the comfort of our homes. Unfortunately, this convenience has also given rise to a surge in returns fraud, including the increasingly prevalent practice of wardrobing apparel. This deceptive act involves customers buying merchandise, using it briefly, and then returning it for a full refund, exploiting the returns process and leaving retailers to bear the costs.

While buyer’s remorse is a well-known concept, wardrobing escalates this issue. Given the importance of merchandise returns in e-commerce, it’s imperative for retailers to devise strategies that discourage wardrobing without compromising on the service provided to genuine customers. This delicate balance is essential for maintaining customer trust and minimizing financial losses.

Understanding Wardrobing:

Wardrobing, a form of return fraud, is on the rise and has become a significant concern for retailers. The National Retail Federation reported that wardrobing return fraud has been increasingly affecting businesses, causing not only financial losses but also difficulties in distinguishing between legitimate and fraudulent returns. As a result, retailers must be vigilant in identifying wardrobing cases and implementing strategies to prevent them.

Understanding the factors driving wardrobing’s growth, including online shopping’s anonymity and its distinction from other return fraud types, is vital. By grasping the nuances of this deceptive practice, retailers can better protect their businesses and maintain a trustworthy relationship with their customers.

The Growing Trend: The Art of Free Usage and Its Rise

The art of free usage, or wardrobing, has seen a significant rise in popularity in recent years. A recent study showed that 20% of shoppers have practiced wardrobing in the past. It was also projected that up to 43% of shoppers between the ages of 16-24 could continue this trend in the future. This growing phenomenon can be attributed to various factors, such as the desire for luxury items to be used for special occasion events or family photos without paying full price.

As try-before-you-buy (TBYB) practices gain traction, retailers are under pressure, with 70% reporting potential negative impacts on their profits. To make matters worse, some clothing manufacturers facilitate wardrobing by using tags that can be easily removed and reattached without any evidence of tampering, further exacerbating the problem.

Wardrobing vs. Other Frauds: Snap and Send Back, Counterfeit Product Switches, and More.

Wardrobing is just one form of return fraud that retailers must contend with. Other types include:

  • Snap and send back: a trend driven by social media and the pressure to showcase up-to-date, fashionable outfits. Influencers, fashion bloggers, and even everyday consumers may take advantage of businesses by wearing items only for a photograph and then returning them.

  • Counterfeit product switches: when a customer purchases a genuine product, switches it with a counterfeit, and then returns the counterfeit for a refund.

  • Tag switching: when a customer switches the price tag of a lower-priced item with that of a higher-priced item in order to pay less at the checkout.

These types of return fraud can have a significant impact on retailers’ profits and operations, making it even more crucial for businesses to differentiate between fraudulent claims and legitimate returns.

Counterfeit product switches pose another threat to e-commerce merchants. Scammers may engage in the following fraudulent activity:

  1. Purchase a fake item that costs only a fraction of the original.

  2. Buy the authentic product from an authorized seller.

  3. Return the counterfeit item to receive a full refund.

This deceptive practice allows scammers to profit while deceiving both the seller and the consumer.

To safeguard their business and uphold their reputation among genuine shoppers, retailers need to diligently detect and address these distinct return fraud forms.

The Digital Anonymity Problem: How Online Shopping Enables Wardrobing

Online shopping’s faceless nature has inadvertently created a thriving environment for deceitful practices like wardrobing. The digital anonymity problem refers to the difficulties and risks related to online anonymity, which can enable damaging activities like wardrobing.

Acknowledging the challenges presented by the digital environment, retailers should adjust their strategies to fortify their businesses against wardrobing and other return fraud forms.

The Direct Costs

Retailers face significant financial losses due to wardrobing. In 2021 alone, retailers experienced a loss of almost $13 billion in sales because of returns. But the consequences of wardrobing extend beyond financial impact; it also has negative effects on the environment and brand reputation.

To minimize these costs and safeguard their businesses, retailers need to take a proactive stance against wardrobing.

Financial Consequences for Retailers: Evaluating the Monetary Impact

Wardrobing leads to substantial monetary losses for retailers. It is often difficult to resell items that have been used, particularly clothing, for full value. As a result, these items must typically be placed on a discount or clearance rack and sold at half (or even less) of their original price. This adds to the cost of processing returns and, according to research, return fraud (including wardrobing) costs the retail industry $12.6 billion in lost sales.

In addition to lost revenue, wardrobing can have several negative effects on retailers, including:

  • Difficulty in accurately predicting which items will be in stock, leading to a shortage of one item and an excess of another

  • Lost sales to non-wardrobing customers

  • Significant monetary losses

To address this issue, some retailers, like ASOS, have implemented policies to track social media accounts of serial returners and block those abusing their return policy.

Beyond Finances: Environmental Concerns and Brand Reputation

Aside from the financial costs, wardrobing also has negative environmental effects. It has been estimated that billions of dollars’ worth of returned merchandise is disposed of in landfills in the US annually.

Furthermore, wardrobing can have detrimental effects on a brand’s reputation by generating a negative outlook on their customer service and return policies. Retailers must not only focus on the financial consequences of wardrobing but also consider the environmental and reputational damage it can cause.

Identifying Wardrobing Red Flags:

To effectively combat wardrobing, retailers must be vigilant in identifying its warning signs. Damaged or missing tags and evidence of wear are key indicators that can help retailers detect cases of wardrobing. By recognizing these red flags, retailers can take appropriate action to address wardrobing cases and protect their businesses from its damaging effects.

A thorough inspection of returned items is key to spotting potential wardrobing cases. Retailers must ensure that they follow their return policies and thoroughly inspect all returned items to determine if they have been worn or used. By doing so, they can minimize the risk of wardrobing and maintain a trustworthy relationship with their customers.

Damaged or Missing Tags: An Obvious Warning

Damaged or missing tags are a clear indication of wardrobing. Retailers should be vigilant in inspecting returned items for any signs of tampering, such as damaged tags or tags that have been removed and reattached, ensuring all tags attached are in their original condition.

By carefully checking for these warning signs, retailers can identify potential cases of wardrobing and take appropriate action to protect their businesses from the financial and reputational damage it can cause.

Signs of Wear: Subtle Indications of Use.

Subtle signs of use can also indicate wardrobing. Retailers must meticulously inspect returned items for any signs of wear, such as:

  • wrinkling

  • spotting

  • staining

  • soiling

Identifying these subtle indications can help retailers detect wardrobing cases and take the necessary steps to address them, ultimately safeguarding their businesses from the negative consequences of this deceptive practice.

Strategies to Prevent Wardrobing

Retailers need to employ a variety of strategies to prevent wardrobing and safeguard their businesses. These include:

  • Establishing clear return policies

  • Inspecting items thoroughly

  • Utilizing anti-wardrobing tags

  • Balancing consumer-friendly policies with risk prevention

  • Offering refunds for returns via Store Credit

  • Offering refunds for returns via Gift Cards

By employing these tactics, retailers can effectively deter wardrobing and maintain a positive relationship with their customers.

It’s worth noting that no single strategy can completely eliminate wardrobing. Retailers must be prepared to adapt and refine their approaches as the retail landscape evolves and new challenges arise. By staying vigilant and proactive, retailers can minimize the impact of wardrobing and ensure the long-term success of their businesses.

Keep in mind, wardrobing is not a victimless crime and the onus lies on retailers to take protective actions for their businesses. By implementing effective strategies and staying vigilant, you can minimize the impact of wardrobing and create a more sustainable, profitable future for your business.

Implementing Clear Return Policies: Setting Ground Rules

Establishing clear return policies is an essential first step in combating wardrobing. By setting ground rules and explicitly stating the expectations for returns, retailers can minimize the risk of wardrobing and other forms of return fraud.

A well-defined return policy should be displayed prominently in multiple locations, such as:

This ensures that customers are aware of the terms and conditions governing returns.

WeSupply equips online and omnichannel retailers with the Return Policy Enforcer tool. This ensures only returns adhering to the policy are accepted, while non-compliant ones await detailed inspection by your staff.

Strengthening Inspection Processes: Vigilance in Returns Management

Vigilant inspection of returned items is crucial in wardrobing prevention. Retailers should promptly inspect all returned items and refrain from issuing a refund until they are certain the item was returned lawfully and not for the purpose of wardrobing. When conducting the inspection, it is important to take the necessary time to ensure its effectiveness, rather than rushing through the process.

Utilizing Anti-Wardrobing Tags: Exploring the 360 ID Tag and Other Solutions

Anti-wardrobing tags, such as the 360 ID Tag, can play a significant role in preventing wardrobing. These tags are designed to be difficult to remove or conceal when an item is worn, making it more challenging for customers to engage in wardrobing.

The 360 ID Tag is equipped with serial numbers that make it non-transferable, as well as a tamper-evident security seal that reveals an obvious VOID pattern when altered or removed. By utilizing anti-wardrobing tags, retailers can deter wardrobing and protect their businesses from its damaging effects.

In conjunction with this, WeSupply’s Return Policy Enforcer offers an intuitive solution. It provides a straightforward yes/no query mechanism to verify an item’s eligibility for returns. Moreover, the returns process enables you to require customers to upload an image of the item, verifying its state. This feature aids administrators in more effectively deciding whether to approve or deny the return. By integrating these systems, retailers can effectively deter fraudulent behavior, streamlining the return process for genuine customers and ensuring a fair and efficient experience for all.

Balancing Consumer-Friendly Policies with Risk Prevention: Walking the Fine Line

Finding the balance between accommodating customers and preventing wardrobing is a delicate task. Retailers must strike a balance between consumer-friendly policies, such as generous return windows and hassle-free returns, and effective risk prevention measures that deter wardrobing.

By maintaining this equilibrium, retailers can foster trust and loyalty among their customers while minimizing the impact of wardrobing on their businesses.

Offering Store Credit: An Alternate Solution to Cash Refunds

Providing store credit instead of cash refunds can be an alternative solution to deter wardrobing. Store credit encourages customers to make additional purchases from the retailer, helping to recoup some of the cost of returned items. Moreover, it discourages customers from engaging in wardrobing, as they cannot simply return an item for a full cash refund.

By offering store credit for return merchandise, retailers can minimize the impact of wardrobing and maintain a positive relationship with their customers.

WeSupply empowers you to offer partial or full refunds for returns as Store Credit or Gift Cards directly within the returns process, as eligible refund methods. Customers can seamlessly utilize these credits for subsequent purchases in your online platform. Furthermore, this feature allows you to maintain an accurate record of sales and vigilantly oversee items that were previously exchanged.

Monitoring and Responding:

Beyond deploying prevention strategies, retailers must also track and react to wardrobing cases as they surface. This involves keeping a close eye on customer records, handling wardrobing cases promptly, and considering blacklisting as a potential measure to deter repeat offenders. By remaining vigilant and proactive in addressing wardrobing cases, retailers can protect their businesses from the damaging effects of this deceptive practice.

Chargeback risks also pose a significant challenge for retailers. Chargebacks can be costly, resulting in lost revenue and additional fees, as well as damaging a retailer’s reputation and leading to customer dissatisfaction. Retailers must manage refund disputes carefully to minimize chargeback risks and safeguard their businesses from the financial consequences of wardrobing and other return frauds.

Monitoring Customer Records: Spotting Abnormal Patterns

Keeping an eye on customer records can help retailers spot abnormal patterns indicative of wardrobing. By monitoring for suspicious activity, such as multiple returns from the same customer, returns of items not in their original condition, or returns of items that have been used, retailers can identify potential wardrobing cases and take appropriate action to address them.

Handling Wardrobing Cases: When Prevention Fails.

When prevention measures fail, retailers must be prepared to address wardrobing cases. This involves taking proactive steps, such as refusing the return, issuing a store credit instead of a cash refund, or blacklisting the customer.

By responding promptly and effectively to wardrobing cases, retailers can minimize the impact of this deceptive practice on their businesses and maintain a trustworthy relationship with their customers.

The Role of Blacklisting: An Extreme But Necessary Measure.

Blacklisting can be an extreme but necessary measure to prevent wardrobing. By restricting customers who have exhibited wardrobing behaviors from making purchases or returns, retailers can deter these individuals from engaging in this deceptive practice.

While blacklisting may seem harsh, it can be an effective tool in protecting businesses from the financial and reputational damage caused by wardrobing.

Navigating Chargeback Risks: Managing Refund Disputes.

Managing refund disputes is crucial in minimizing chargeback risks. Retailers should establish clear policies and procedures for handling disputes, ensuring that they are fair and transparent, including a well-defined return process.

By addressing disputes promptly and effectively, retailers can minimize the impact of chargebacks on their businesses and maintain a positive relationship with their customers.

Adapting to the Changing Retail Landscape:

In the face of the ever-evolving retail landscape, retailers must stay agile and adapt their strategies accordingly. Embracing technology and fostering customer loyalty can help combat wardrobing and encourage ethical shopping habits, protecting businesses from the financial and reputational damage caused by this deceptive practice.

Through proactive measures and adapting to the transforming retail landscape, retailers can mitigate the impact of wardrobing and foster a more sustainable, profitable future for their businesses. This involves:

  • Implementing effective prevention strategies

  • Monitoring and responding to wardrobing cases when they arise

  • Ensuring that businesses remain protected from this damaging practice

Embracing Technology: New Tools to Combat Old Tricks.

Retailers can leverage new tools and technology to combat wardrobing and other return frauds. Innovations such as anti-wardrobing tags, RFID tags, and facial recognition software can help retailers detect and prevent fraudulent returns, reducing the impact of wardrobing on their businesses.

Moreover, post-purchase software with an emphasis on returns & exchanges such as WeSupply can alleviate the impact of wardrobing through a streamlined returns process which encompasses complex and well-defined return logics and rules.

By embracing these technological advancements, retailers can stay ahead of the curve and protect their businesses from the damaging effects of wardrobing and other deceptive practices.

Fostering Customer Loyalty: Building Trust and Encouraging Ethical Shopping Habits.

Building trust with customers and fostering loyalty can encourage ethical shopping habits and reduce the likelihood of wardrobing. Retailers can achieve this by providing exceptional customer service, offering personalized experiences, and implementing fair and transparent return policies.

By cultivating strong relationships with their customers, retailers can create an environment where wardrobing is less likely to occur, protecting their businesses and promoting a more sustainable, ethical retail landscape.

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Conclusion: Future-Proofing Your Business Against Wardrobing and Returns Fraud.

Conclusively, the escalating issue of wardrobing presents significant challenges for retailers. By implementing a range of strategies, adapting to the changing retail landscape, and fostering customer loyalty, retailers can protect their businesses from the damaging effects of wardrobing and other return frauds.

The future of retail may be uncertain, but by staying proactive and vigilant, retailers can minimize the impact of wardrobing and create a more sustainable, profitable future for their businesses.

Summary

Wardrobing is a deceptive practice with far-reaching consequences for retailers, from financial losses to environmental impact and damage to brand reputation. By understanding the nuances of this growing trend, implementing effective prevention strategies, and adapting to the changing retail landscape, retailers can protect their businesses and foster a more ethical shopping environment. Now is the time to tackle wardrobing head-on and future-proof your business against this damaging practice.

Frequently Asked Questions

How do I stop wardrobing?

To stop wardrobing, implement a clear return policy and inspect returned products. Additionally, utilizing an anti-wardrobing tag can be effective in deterring fraudulent returns.

What is wardrobing?

Wardrobing is a form of return fraud, costing the retail industry $12.6 billion in lost sales according to the National Retail Federation. It occurs when shoppers return worn items they intended to use and then discard.

Is wardrobing a crime?

Wardrobing is not illegal, but it violates most merchants’ return policies and is not supported by card networks or banks.

What is free wardrobing?

Free wardrobing is the practice of buying an item, wearing it for an occasion, and then returning it for a full refund. It is a form of returns fraud in the clothing retail industry.

What are some warning signs that indicate wardrobing?

Signs of wardrobing include missing or damaged tags, as well as evidence of wear on the returned item.

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