When Mahitha Saldana headed to CVS to make some returns, he wasn’t expecting any problems. So it came as a shock when the cashier firmly refused to accept the items. When he asked for an explanation, she referred him to something called The Retail Equation.
Like Mahitha, you may have never heard of The Retail Equation. But if you frequently make retail returns, your name and information about your shopping patterns may already be stored in this nationwide database.
“My receipt had a 90-day return policy, and I still had several weeks left to return the items,” Mahitha complained. “The things I was trying to return were not opened and not used. Why should CVS refuse my returns?”
The answer: Because it can.
Fact: It’s not a consumer’s right to make excessive retail returns
Mahitha was under the mistaken impression that it’s a consumer’s right to be able to return any retail item as long as they return it within the period of time noted on the receipt.
Not true.
In fact, there are no federal or state laws that require merchants to accept items for return, unless the particular item is defective. Changing one’s mind about a purchase does not guarantee that the merchant will reverse the transaction.
Of course, most companies have determined that it makes good business sense to have a flexible return policy.
What about customers who abuse return policies?
Most customers do not abuse retail return policies, but there is a small percentage of customers who are “serial returners.” These consumers love to buy and return products.
Some of these customers are intentionally involved in fraudulent activity (returning stolen items). While the intent of others may be categorized as a type of “friendly fraud” (someone who buys an expensive dress for an event with no plans of keeping the garment, or takes a cruise and files a credit card dispute after the trip). Then there are also the consumers who impulsively buy items and have buyer’s remorse later.
These “customers” end up costing retailers billions of dollars each year. Ultimately, that cost is factored into higher prices on consumer products.
So we all pay.
The Retail Equation: What is it?
The Retail Equation was developed to identify these serial returners and to create a warning system for merchants.
Here’s how it works: When a merchant uses The Retail Equation, and a consumer shows up to return an item, the cashier scans his or her driver’s license. The system then does an instant check of this shopper’s return history and then gives an approval, a warning or a do-not-accept message.
The Retail Equation (TRE) website points out that it approves “99 percent” of the requests.
The other 1 percent?
TRE states that the customers who do not receive approval “exhibit behaviors that mimic fraud or abuse or habits that are inconsistent with the retailer’s return policy.”
A personalized Return Activity Report
When The Retail Equation rejects a consumer’s return, the merchant provides instructions about how to request a copy of his (or her) own personalized Return Activity Report (RAR). This is a record of all of the consumer’s return and exchange transactions.
Mahitha did receive a copy of his RAR which he forwarded to me.
His shopping history at CVS was a bit unusual. In one month, his RAR listed four shopping trips to CVS. The receipts included various household merchandise, paid for with a mixture of coupons, rewards, and cash. The RAR highlighted four additional trips to CVS. These visits noted Mahitha’s returns of the majority of his purchases.
It was during his fifth return when he attempted to take back products totaling $72, that The Retail Equation put the brakes on his transactions.
I asked Mahitha why he would return such items and so frequently.
“I bought some stuff which I thought was a good deal or something like that. Then they change the price of some items and I return the items that I bought,” Mahitha told me. “With a valid receipt, CVS must take my returns.”
The official response from CVS
CVS disagreed.
I reached out to the company on Mahitha’s behalf and our executive contact explained:
CVS has partnered with The Retail Equation (TRE), the industry leader for return management services, to provide a consistent, customer-focused return policy while leveraging their expertise to mitigate potentially fraudulent return activity in our stores. TRE’s return management services are utilized by several major retailers representing more than 34,000 retail locations in the U.S. Since implementing TRE’s solution earlier this year, approximately .003 percent (or one-third of 1 percent) of returns have been declined at our stores.
CVS posts our return policies in our stores at the point of sale. These are also available online or as requested by our customers. In our return policy, similar to other major retailers, we reserve the right to decline to accept a return even if accompanied by a receipt if it does not pass our third-party verification.
CVS spokesperson
He went on to say that CVS gives every customer who The Retail Equation rejects a number to call to dispute the rejection. But Mahitha had not initiated this process.
The final word: Watch those returns or The Retail Equation might catch you, too
Mahitha will need to change his shopping habits. CVS is within its legal rights to reject his request. The company offered him the means to dispute the decision of The Retail Equation. But his experience serves as a warning to others who may be developing their own questionable shopping patterns — be careful, or you, too, may be surprised at the return counter. (Michelle Couch-Friedman, Consumer Rescue)
