Buy now, return later, money back guaranteed. How America scores free stuff

Indianapolis Star

2 days ago

When Tom Haverford goes camping with coworkers in a 2011 episode of the NBC comedy 'Parks and Recreation,' he tricks out his tent with an Xbox, fondue pot, panini press, soft-serve ice cream maker, DJ roomba, even a real bed.
'How do you afford all this stuff?' he's asked. 'I just return it the next day and claim it was defective,' replies Haverford, played by actor Aziz Ansari, while sprawled in a hammock enjoying an electric scalp massage. 'The key is crying a lot. No one likes to hear a grown man cry.'
Like most sitcom material, the antic is borrowed from real life.
Liberal return policies have inspired sketchy behaviors such as 'wardrobing' – when people buy expensive outfits for a special occasion and tuck the tags out of sight so they can return them the next day.
Now, in a practice known as 'weekend rentals,' shoppers take home a leaf blower or a hedge trimmer only to return it when they're done with it.
With high inflation and tight budgets, Paco Underhill, author of 'Why We Buy: The Science of Shopping,' says this 'rent the runway' mindset is only spreading.
People are 'renting' and returning more things: Plants for open houses, outdoor tables and chairs for a party and giant televisions to watch the Super Bowl. Pressure washers and paint sprayers are discarded after home-improvement projects. Some people even bring back the ladders they used to string holiday lights from their rooflines.
'So many of the things that we buy are based on some form of immediate need and often, when that's over, it's just over,' Underhill said.
Retail staffers who process returns at big-box stores frequently grouse online about 'rentals through the returns desk' or the 'service desk rental program.' And they say they can predict product returns by the seasons.
At Costco, where a "risk-free 100% satisfaction guarantee" gives members an unlimited grace period to bring back most purchases, snowblowers flood the returns area after the last winter storm, portable generators and chainsaws after hurricane season and air conditioning units after the summer heatwave.
A Costco employee who has worked with the company in multiple states says trees, inflatables and other holiday decor get stacked seven feet high after Christmas.
Some members fly Old Glory only to return the American flag after July 4, according to the staffer who also spoke on the condition of anonymity. Others 'rent' jewelry for black-tie events, including one customer who returned three $2,000-plus necklaces in one summer.
And just this month, the employee processed a return for $500 worth of meat, cheese and dip left over from a wedding with fewer guests than expected.
A couple of years ago at a Connecticut warehouse, a Costco member showed up at the returns desk in early November lugging an animatronic scarecrow, a 10-foot-tall witch and bags of candy from a haunted tractor ride.
With no room at home to store his Halloween haul, he demanded a full refund. The store's manager explained that Costco isn't in the rentals business but processed the return anyway, an employee told USA TODAY on the condition of anonymity for fear of losing her job.
When the same member turned up in early January with thousands of dollars worth of inflatable snowmen, reindeer yard decor and string lights from a winter wonderland-themed tractor ride, Costco turned him down.
Other returns, the employee said, that have been accepted at her warehouse: massage guns after the member worked out a muscle knot and a fully assembled gingerbread house because 'it looks bad.'
They returned dirty toilets and rugs. Then came the backlash.
Shoppers who abuse return policies often excuse their behavior as a one-off or say they're just doing what everyone else is. After all, they say, what's the harm in swindling a megabucks corporation?
'Consumers often justify their actions by believing that the benefit to them outweighs the harm to the company,' said Ayelet Fishbach, professor of behavioral science and marketing at the University of Chicago Booth School of Business.
The money-back guarantee dates back at least as far as the mid-1700s when an innovative small-town English potter Josiah Wedgwood used the gimmick to lure customers and close sales in the fine china market, according to USA TODAY research.
In America, businessman Potter Palmer embraced the concept a century later when he encouraged well-heeled customers of his dry goods store in Chicago to take home merchandise on approval. Marshall Field, who took over from Palmer, carried on that legacy with his namesake department store's no-questions-asked return policy.
The policy soon caught on elsewhere. In the late 1800s and early 1900s, Sears catalogs were printed with the slogan: 'Satisfaction guaranteed or your money cheerfully refunded.'
With successive generations of merchandising legends, from James Cash Penney of JCPenney to Sam Walton of Walmart, 'the customer is always right' became an article of faith.
But the returns free-for-all really took off with the advent of internet shopping as e-commerce companies jockeyed for shoppers' eyeballs and their wallets.
The competitive pressure forced more brick-and-mortar establishments to loosen their return policies, too, according to Zac Rogers, an associate professor of operations and supply chain management at Colorado State University.
Zappos' customer-centric return policy was so successful that eventually Amazon bought out the retailer for $1.2 billion.
'What e-commerce has done is reset consumer expectations for the ways that retailers should behave,' Rogers said.
But goosing sales with lenient returns quickly turned into a logistical and costly headache for retailers.
Returns were projected to reach $890 billion in 2024, according to a report by the National Retail Federation and Happy Returns, a UPS company. Retailers estimated that nearly 17% of their annual sales in 2024 would be returned.
The vast majority (93%) of retailers point to retail fraud and other exploitative behaviors as a major issue for their business, citing the increased operations expenses to process returns and increased shipping costs.
"They created this monster that they now have to deal with,' Rogers said.
With so much merchandise headed for liquidation centers or landfills, many retailers have responded by shrinking their refund windows or by charging return fees.
Despite the high costs, retailers are still cautious about how much they rein in liberal return policies, worried that discouraging returns will discourage people from making the purchases in the first place. But they aren't the only ones stuck footing the bill.
'As a vendor, we are required to accept 100% of the returns of our products, no questions asked, regardless of the reason,' an executive for a vendor told USA TODAY on the condition of anonymity because he feared losing business from Costco and other big-box stores.
Return rates can run as high as 20% or more depending on the product, he said.
It's not just lost sales vendors have to absorb. They have to cover the cost of shipping returned products back to the warehouse and all other associated fees.
A few years ago, Costco briefly considered narrowing the return window to 90 days on outdoor power equipment, but management rejected the proposal, according to the executive, and vendors have paid the price.
When he worked for a company that sold lawnmowers to Costco, the lawnmowers would fly out the door in the spring, only to fly back in come October.
'We would get used lawnmowers back and they were not even our brand,' he said. 'People would go buy a new mower, put their old mower in the box and return it.'
That behavior 'is not the norm,' he said. 'But it's not the exception either.'
Neil Saunders, a retail analyst at the research and analytics firm GlobalData, said he expects to see more retailers crack down on bad behavior.
Home Depot, sometimes referred to as "Rent a Depot" or 'Returns Depot' because of returns abuses, recently instituted a 7-day return policy on pressure washers, dehumidifiers, window and portable air conditioners and generators.
A spokeswoman denied that frequent returns were behind the policy shift.
'We added the 7-day return policy for categories that our customers need in the event of a natural disaster,' Beth Marlowe said in a written statement. 'By shortening the return window, we can have more inventory on hand to quickly move to the communities where these products are needed most.'
Whatever the motivation, the new policy has slowed returns in these product categories, according to store employees.
A Home Depot worker in Virginia, who spoke on the condition of anonymity for fear of losing his job, said he used to watch customers return window AC units typically within two to three weeks.
After the new policy took effect in June, he overheard some customers saying they planned to buy an air conditioning unit to cool off during a heatwave. When they approached him, he pointed out the new policy and they left without buying one.
But what about customers with legit returns?
When Josh Powell, a 31-year-old organ transplant coordinator from Sherwood, Arkansas, fired up the pressure washer he bought online from Home Depot to clean the siding on his new house, it began belching black smoke. So he packed up the big box and crammed into his compact SUV for the 10-minute drive to his local store.
With a full refund in hand, he bought another pressure washer on the spot, but this was before the 7-day policy went into effect. Now, Powell worries what will happen if he has a problem outside that window. Too often, he says manufacturers make it difficult to return defective goods. Will he get stuck with a $500 lemon?
'People are always looking for the best benefit for them and they will take advantage of any policy they can find, so I understand why certain retailers are cracking down,' he said. At the same time, he says he would go 'full Karen' if a retailer refused to return a faulty product.