Consumers wanting more lenient return policies are often getting them

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Kathleen Segan of Minneapolis doesn't blame Bed Bath & Beyond for paying out only 80 percent when a customer returns an item without a receipt.

"How are they supposed to distinguish between a regular return and one that was shoplifted?" she asked.

Segan said she appreciates the company's liberal return policy and its store coupons. So the recent change by Bed, Bath & Beyond to deduct one-fifth of the purchase price from a return without a receipt won't affect her. Besides, she keeps her receipts.

Generous return policies draw customers to stores like Costco, Macy's, J.C. Penney, Nordstrom, Kohl's, L.L. Bean, Lands' End and Bed Bath & Beyond. But those retailers face trade-offs.

"Returns continue to be a pain point for consumers and retailers," said Tom Caporaso, CEO of Clarus Marketing Group. "Without a good return policy, consumers take their business elsewhere."

Bed Bath & Beyond isn't saying why it changed its policy, but I'll wager a guess. The 20-percent-off coupons it seems to mail out monthly are so common that I rarely see a customer not using one.

Bed Bath & Beyond made returns so easy that some customers probably found a way to make a 20 percent return on their money by using a coupon on the original purchase and then getting full merchandise credit.

Return fraud cost U.S. retailers $10.9 billion last year, according to the National Retail Federation. During the holidays, retailers estimate 5 percent of returns are fraudulent. At the Better Business Bureau of Minnesota and North Dakota, about 35 percent of complaints involve return policies.

I'm surprised that it took Bed Bath & Beyond so long to make the change and believe it is to be commended for its still-generous policy. The only consumer who will experience inconvenience is the person who paid cash for a purchase. Purchases made with a credit or debit card or check can be tracked for a year there and at most retailers.

If you think this is a trend toward stricter return policies, it's not. In fact, with many online competitors now offering free return shipping, stores' return policies may get more lenient to remain competitive, said Marshal Cohen, a retail analyst at the NPD Group in New York.

In March, Target extended the return policy on 32 of its private-label brands to one year instead of 90 days. "A top complaint of our guest has been the return policy," said Dustee Jenkins, vice president of communications at Target. Chief Executive Brian Cornell changed it because of his focus on the customer, she said.

Cohen believes other retailers will follow Target with longer return windows. "You'll see more retailers carrying that forward," he said. On the other hand, Bed, Bath & Beyond is an example of a retailer pulling back slightly on a too lenient policy.

Electronics retailer Best Buy in 2013 shortened its return policy on all items to 15 days for most customers and 30 to 45 days for members of its Elite loyalty program. The 15-day window chafes a lot of consumers, but because technology changes so quickly, electronics items tend to lose value rapidly. Best Buy had to adopt a buy-and-stick policy or risk losing too much money, Cohen said.

Other retailers aren't matching Best Buy's 15-day policy because they're more diversified into non-electronic products. Sears, Target, Wal-Mart, Costco and Office Depot generally give 30 to 90 days. Although they may be tempted to shorten that, 30 or 90 days can give them a slight competitive advantage over Best Buy.

You may disagree, but these are good times for consumers in many ways. Store pickup, free delivery, price-comparison apps and price matching are all putting shoppers in the driver's seat as never before. The Better Business Bureau of Minnesota believes that price matching may be the reason they've seen a decrease in complaints about return policies.

Retailers are not required to take back merchandise. A retailer can choose to make all sales final, or offer merchandise credit only, as long as the policy is clearly stated. According to the Better Business Bureau, the policy must be made available to consumers in "a clear, conspicuous and transparent way, as a best practice."

Some of us used to buy an item at one store and then return it when we discovered it was cheaper at a competitor. Now we just ask for a price match, assuming that we jump through enough hoops to show a lower price from a competitor's current ad on the exact same item. It's a pain, but that's another column.

John Ewoldt • 612-673-7633