MIAMI– American companies and retail chains lost more than $100 billion last year due to return fraud and increased customer abuse.
Due to the large losses, the Target store chain decided to review its return policy to address continued abuse by customers.
But Target is not the only retailer facing serious problems related to return fraud, according to reports cited by media outlets such as the New York Post.
The red circle chain’s updated policy now specifies Target’s “right to refuse returns, refunds and exchanges,” with the goal of preventing scams and discouraging fraudulent behavior.
“Target reserves the right to refuse returns, refunds and exchanges to prevent fraud or abuse if suspicion exists,” the updated website reads.
The company has maintained its original policy that allows most unopened items in excellent condition to be returned within 90 days, also for factory defects in the products.
The measure could be imitated by other retail chains
The new measure, which other store chains can imitate, imposes that deceptive practices will not be tolerated. Staff will now be vigilant to identify potential fraud.
This change comes amid a broader trend in which retailers have lost significant revenue (about $101 billion) last year due to return abuse, according to the National Retail Federation.
In the past, many retailers, including Target, have had problems with customers abusing return policies, often returning used, broken or damaged items that appeared to be in good condition.
Walmart, Home Depot, Lowe’s, Sam’s Club, TJMaxx and many other retail firms could also tighten their return policies, but with the latent risk that purchases will decrease because consumers would also control their impulsive spending more.
In addition to changes to its return policy, Target has also stopped accepting personal checks as a form of payment.
This decision, which applies as of July 15, reflects a decline in the popularity of checks as a payment method, particularly among younger consumers who prefer cards or digital wallets.
The elderly were the ones who used this payment system the most, but in recent years the use of checks among that sector has also been considerably reduced.
Checks: an almost obsolete method in purchases of minor items
Retail experts noted that checks became obsolete in modern times. Other retailers, such as Aldi and Whole Foods, have already eliminated the use of personal checks entirely.
The policy adjustments at Target reveal the panorama of losses that have been growing for years both in physical stores and online.
In current times, fraud and customer deception has grown as consumers find themselves increasingly suffocated by high prices in the last four years under the inflation created by the government of Joe Biden and Kamala Harris.
For retailers, returns and payment method fraud are critical considerations for maintaining profits and customer trust.
By updating its return policy and eliminating checks, Target adjusts to the changing dynamics of payment preferences in the retail sector and the challenges it faces in the face of the worst US inflation in nearly five decades.
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