NEW YORK – Returning a party dress the day after a big soiree is getting harder to do.
Instead of just tagging merchandise before its purchased to prevent theft, the Bloomingdales department store chain is keeping some garments tagged after theyre sold, too. The 3-inch black plastic devices are in visible places, such as the front bottom hemline, so theyre hard to hide when the garment is worn. Once shoppers remove the tags, which cant be reattached, they cant return the item.
Bloomingdales, owned by Macys Inc., is using the tactic to combat a practice known as wardrobing – buying clothes and using them once – a form of return fraud, which the National Retail Federation estimates cost the industry $8.8 billion last year.
Curtailing such practices is complicated, because while stores want to protect themselves, they risk demonstrating a mistrust of customers who are paying thousands of dollars for garments. Its a gamble that some chains, including Nordstrom Inc., arent taking.
It is a delicate balance of loss prevention and good customer service, and the relationship has to be handled with appropriate finesse, said Rich Mellor, vice president of loss prevention at the NRF.
Wardrobing – defined by the NRF as returns of used, non-defective merchandise – is a problem for the industry, because stores find it difficult to resell such items if theyre soiled or have gone out of style. They cant even be shipped off to be sold at off-price retailers, Mellor said.
About 65 percent of retailers in a November survey by the NRF reported experiencing wardrobing last year, up from 61 percent a year earlier. The merchants suspected that 3.3 percent of their total returns last year were fraudulent, according to the Washington-based trade groups survey.
The poll also was the source of the estimate of total loss from return fraud, which includes using counterfeit receipts and returning stolen goods.
Minimizing losses from theft and fraud may help retailers as consumers slow purchases of non-essential merchandise.
Bloomingdales Cincinnati-based parent company last month cut its forecast for profit in the current fiscal year after second-quarter sales unexpectedly fell.
Preventing wardrobing also would help during the approaching holiday season, the largest spending period of the year and a time of numerous parties and formal events.
At Bloomingdales New York flagship store, some dresses on the racks already have the tags on them. Also, the retailers online shoppers are alerted on the items details tab that the product will arrive tagged. Tag alerts appear on some gowns offered on the site after searching prom dress.
Jim Sluzewski, a spokesman for Macys, and Marissa Vitagliano, a spokeswoman for Bloomingdales, declined to say when the chain began using the tags and wouldnt provide any other details, citing a company policy of not discussing return fraud.
Nordstrom doesnt use such tags, Colin Johnson, a spokesman for the Seattle-based company, said in an email.
Our experience is that if you treat the customer with respect, they respect you back, Johnson said.
If a garment comes back obviously used – sweat-stained, for example – the retailers can refuse to refund it. Stores tend to be lenient in one-off situations while being firmer with repeat offenders, Mellor said.
Department stores have a higher return rate than other retailers and have been more susceptible to fraud, Mellor said.
Not only do they typically have more permissive return policies, but they also carry high-fashion eveningwear that is more prone to one-time use for special occasions.
Still, theyre not alone in trying to fight return fraud. L Brands Inc., owner of Victorias Secret, has used a database to track return patterns and identify customers from whom to refuse returns.
Chains also use receipts that are harder to replicate because they are printed with proprietary, identifiable inks. That helps them prevent returns based on counterfeited receipts.
For Bloomingdales, the new tags were a necessary move, said Marie Driscoll, founder of Driscoll Advisors, a New York-based retail consulting firm. A growing number of customers, including younger shoppers, were buying fancy dresses, wearing them once and returning them.
They are going to alienate customers that abuse the policy, Driscoll said, and I dont think that is so bad.