As stores clamp down on returns, “Retail Equation” bans anger customers

INDIANA -- More stores are now using a program called “Retail Equation”, designed to catch fraudulent returns.

But it’s catching some flak for banning seemingly legitimate customers.

“Retailers are losing millions of dollars in merchandise, walking out the front door and they’re doing everything they can to prevent that from happening,” said Grant Monahan, president of the Indiana Retail Council.

Everything now includes the Retail Equation.

This week The Wall Street Journal blew the lid off the program stores like Best Buy, Victoria’s Secret, Toys ‘R’ Us and Home Depot are using to track customers’ return behavior.

The end goal to limit the amount of merchandise customers can bring back with or without a receipt.

“So much of this merchandise is stolen and then people bringing it back for cash or in-store credit or gift cards,” said Monahan.

Of course not everyone returning an item is stealing. But tweets and Facebook posts indicate that some legitimate customers are getting flagged.

With Retail Equation, customers are starting to find out that the program’s math, is king. If you’re banned, there’s nothing anyone at the store can do to override Retail Equation’s solution.

Customers, as these tweets show, have to take it up with Retail Equation’s customer service representatives to dispute their ban.

But some customers are irked knowing their legitimate returns could be wrongly flagged, making them feel like criminals.

“If they’re trying to protect against a legitimate, fraudulent returns, then absolutely they should be able to do that as a business to protect their best interests. But if they’re just protecting their interests at the cost of legitimate consumer activity, I don’t think that’s a good thing to do.”

Another customer says he understands cracking down on returns, but questions whether returns with the proper paperwork should be tracked at all.

Ball State’s Eric Harvey, a marketing professor who’s also the director for their Center for Digital Marketing and Analytics, isn’t surprised customers aren’t happy with the idea or the practice.

“The way people shop today is for that customer experience and they’re not going to tolerate this type of, you know, of business,” said Harvey.

He thinks using Retail Equation won’t help catch enough bad returns to justify losing customers and their friends when it flags the good ones.

“People are busy these days,” Harvey. “They don’t have time to go back in the store, show them the receipt and then, to get hassled, chuckles on top of that, you know, they’re not going to come back.”

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