Latest news with #DorielAbrahams
Yahoo
7 days ago
- Business
- Yahoo
Do retailers make it too easy to return items? Why shoppers love lenient policies.
Returns of items are both a fact of life for retailers but also a difficult balance to maintain as they try to keep customers happy while not losing money. For consumers, lenient return policies play a big role in where they choose to buy. But then there is also the dark side of returns, with criminal rings set up to take advantage of those lenient return policies. Returns cost retailers a lot of money: total returns were expected to top $890 billion in 2024, according to a December 2024 report by the National Retail Federation. Retailers estimated that 16.9% of their annual sales in 2024 would be returned. But shoppers also say return policies impact where they shop: 67% of shoppers said a negative return experience would impact whether they would go back to that retailer. In a survey by Forter of 4,000 shoppers in both the United States and the United Kingdom, 68% said they believe retailers make it easy to abuse flexible return policies. In fact, 49% admitted to abusing policies in the last year. Another 29% said they use the policies to avoid paying full price. Thirty percent said they use and return expensive wardrobe items they otherwise couldn't afford and that number spikes to nearly half or 46% for younger consumers. More than half, or 58% also said they open multiple online accounts to take advantage of promotions. Retailers have to navigate how to please customers while not losing money on returns, said Doriel Abrahams, principal technologist for Forter, a software company that helps digital commerce brands block fraud. "Clamping down too hard on policies to curb abuse could turn away good customers," Abrahams said, adding that nearly 1 in 5 consumers in the survey said they've stopped shopping with a brand that initiated more strict return policies. "Ultimately, blanket policies – whether that's charging for all returns or having zero restrictions – are bad for business. The goal is to block abuse, not loyal customers, "Abrahams said. Lauren Beitelspacher, a professor in the marketing division of Babson College in Wellesley, Massachusetts whose research includes return policies, said she was not surprised that shoppers abuse return policies, but she was surprised that a significant number admitted to it. The numbers are probably even higher than the 49% of people who admitted to taking advantage of lenient policies in the survey, she said. "Returns have always been a problem, but since the pandemic, it's been really bad," said Beitelspacher. Return policies got very generous during the Covid-19 pandemic when shoppers couldn't go to physical stores and online e-commerce began to explode, said Beitelspacher. But with online e-commerce, comes the lack of being able to feel an item or try it on. "So in order for retailers to minimize the consumers' risk they offer that free returns and free shipping and people just went nuts and took advantage of it," she said. Some retailers started quietly dialing back their return policies or charging for return shipping or restocking fees during the holiday season of 2023, but they didn't make a big deal of it so as not to alienate their customers, said Beitelspacher. "Returns are a big cost for online retailers although, arguably, they are part of the price of doing business in the ecommerce space. The problem is that the consumer rarely covers the full cost of returns, so it harms the bottom line," said Neil Saunders, a retail analyst at the research and analytics firm GlobalData. Tighter policies around returns, such as making the consumer pay, helps offset some of the cost but it also deters customers and can harm sales, so there is a balance to be struck, he said. Social media is full of videos of moms who brag that they have taken a years' worth of used kid clothes from the Target Cat & Jack brand back to Target for a refund or exchange for new clothes. But some shoppers say it is up to the Target store manager's discretion. Are the shoppers who are getting refunds or exchanges smart consumers or taking advantage of a lenient Target policy? Target customers can return the Cat & Jack items or any Target branded item for up to a year with the receipt or proof of purchase in the Target app, a Target spokesperson confirmed. This guarantee is in place because of the confidence the retailer has in the quality of what it is offering when guests shop Target's owned brands, the spokesperson said. Some retailers don't even want the returned product back. An Amazon spokesperson said customers are allowed to receive refunds without returning some products as a convenience to customers. That is allowed on a very small number of returns and helps keep prices low for customers, the spokesperson said. Some shoppers have shared on social media that Walmart in some cases also allows consumers to return an item and keep it. The retailer would not specifically address that claim when asked, pointing to its return policy, which does not have any details about keeping a returned item. A Walmart spokesperson added that she didn't have anything to add on its return policy, but pointed to the retailer's return policy, which says on most items shoppers have 90 days to return. However, in an online guide for its Marketplace or online site, which includes sales from third-party sellers, Walmart offers tips on how those resellers can implement a "keep it rule," allowing customers to keep the returned item. Love 'em or hate 'em?: What's in store for the future of self checkouts? How retailers are pulling back. Beitelspacher, the marketing professor, said retailers will allow customers to return an item on the theory that "the delight that you might feel might make you more of a lifetime customer." The cost of that item to gain the lifetime customer would be more than the cost of absorbing the cost for you to ship the item back, she said. But Beitelspacher also pointed out that Amazon's lenient return policies, while it may help shoppers have better feelings about Amazon, can hurt the many third-party sellers on the platform, who are actually taking the return hit. There's a big difference between a shopper who takes advantage of a retailer's lenient return policy and criminals making a business of bilking retailers through returns – and consumers who participate. Some shoppers purposely buy an item and "wardrobe" it, or wear it with the tags on and then return it, which is arguably gaming the system, said Eyal Elazar, head of market intelligence at Riskified, a company that helps e-commerce companies detect and prevent bad behavior. But criminal rings also exist to defraud retailers and some consumers are participating in this fraud, he said. Real shoppers are using cyber criminals to handle the return process for them, but with a twist, said Elazar. The criminals scam the retailers using methods such as disappearing ink on return labels, which shows proof that some package was scanned in and on its way back to the retailer. When that package doesn't arrive, the criminal can put pressure on the retailer to still give the refund. The customer gets to keep the item and some of the refund while the criminal also gets a cut, he said. The criminals love this method since they don't have to put out any investment to buy stolen credit cards or stolen inventory and are still earning money from the fraudulent returns, Elazar said. This new return fraud really ramped up after the Covid-19 pandemic when people stopped needing to sign for deliveries and when retailers were trying to figure out ways to make consumers happy with the increase in e-commerce and returns, he said. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@ or follow her on X, Facebook or Instagram @blinfisher and @ on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here. This article originally appeared on USA TODAY: Don't like an item? Why shoppers love lenient return policies Sign in to access your portfolio
USA Today
7 days ago
- Business
- USA Today
Do retailers make it too easy to return items? Why shoppers love lenient policies.
Do retailers make it too easy to return items? Why shoppers love lenient policies. Show Caption Hide Caption How to give the best gifts all year long It's never too soon to start gift shopping for your loved ones! This simple tip will help you get them the perfect gift every time. Returns of items are both a fact of life for retailers but also a difficult balance to maintain as they try to keep customers happy while not losing money. For consumers, lenient return policies play a big role in where they choose to buy. But then there is also the dark side of returns, with criminal rings set up to take advantage of those lenient return policies. Returns cost retailers a lot of money: total returns were expected to top $890 billion in 2024, according to a December 2024 report by the National Retail Federation. Retailers estimated that 16.9% of their annual sales in 2024 would be returned. But shoppers also say return policies impact where they shop: 67% of shoppers said a negative return experience would impact whether they would go back to that retailer. Shoppers admit to abusing lenient return policies In a survey by Forter of 4,000 shoppers in both the United States and the United Kingdom, 68% said they believe retailers make it easy to abuse flexible return policies. In fact, 49% admitted to abusing policies in the last year. Another 29% said they use the policies to avoid paying full price. Thirty percent said they use and return expensive wardrobe items they otherwise couldn't afford and that number spikes to nearly half or 46% for younger consumers. More than half, or 58% also said they open multiple online accounts to take advantage of promotions. Retailers have to navigate how to please customers while not losing money on returns, said Doriel Abrahams, principal technologist for Forter, a software company that helps digital commerce brands block fraud. "Clamping down too hard on policies to curb abuse could turn away good customers," Abrahams said, adding that nearly 1 in 5 consumers in the survey said they've stopped shopping with a brand that initiated more strict return policies. "Ultimately, blanket policies – whether that's charging for all returns or having zero restrictions – are bad for business. The goal is to block abuse, not loyal customers, "Abrahams said. Return abuse is on the rise Lauren Beitelspacher, a professor in the marketing division of Babson College in Wellesley, Massachusetts whose research includes return policies, said she was not surprised that shoppers abuse return policies, but she was surprised that a significant number admitted to it. The numbers are probably even higher than the 49% of people who admitted to taking advantage of lenient policies in the survey, she said. "Returns have always been a problem, but since the pandemic, it's been really bad," said Beitelspacher. Return policies got very generous during the Covid-19 pandemic when shoppers couldn't go to physical stores and online e-commerce began to explode, said Beitelspacher. But with online e-commerce, comes the lack of being able to feel an item or try it on. "So in order for retailers to minimize the consumers' risk they offer that free returns and free shipping and people just went nuts and took advantage of it," she said. Some retailers started quietly dialing back their return policies or charging for return shipping or restocking fees during the holiday season of 2023, but they didn't make a big deal of it so as not to alienate their customers, said Beitelspacher. "Returns are a big cost for online retailers although, arguably, they are part of the price of doing business in the ecommerce space. The problem is that the consumer rarely covers the full cost of returns, so it harms the bottom line," said Neil Saunders, a retail analyst at the research and analytics firm GlobalData. Tighter policies around returns, such as making the consumer pay, helps offset some of the cost but it also deters customers and can harm sales, so there is a balance to be struck, he said. Are shoppers using or abusing Target loophole? Social media is full of videos of moms who brag that they have taken a years' worth of used kid clothes from the Target Cat & Jack brand back to Target for a refund or exchange for new clothes. But some shoppers say it is up to the Target store manager's discretion. Are the shoppers who are getting refunds or exchanges smart consumers or taking advantage of a lenient Target policy? Target customers can return the Cat & Jack items or any Target branded item for up to a year with the receipt or proof of purchase in the Target app, a Target spokesperson confirmed. This guarantee is in place because of the confidence the retailer has in the quality of what it is offering when guests shop Target's owned brands, the spokesperson said. Retailers say good return policies are good business Some retailers don't even want the returned product back. An Amazon spokesperson said customers are allowed to receive refunds without returning some products as a convenience to customers. That is allowed on a very small number of returns and helps keep prices low for customers, the spokesperson said. Some shoppers have shared on social media that Walmart in some cases also allows consumers to return an item and keep it. The retailer would not specifically address that claim when asked, pointing to its return policy, which does not have any details about keeping a returned item. A Walmart spokesperson added that she didn't have anything to add on its return policy, but pointed to the retailer's return policy, which says on most items shoppers have 90 days to return. However, in an online guide for its Marketplace or online site, which includes sales from third-party sellers, Walmart offers tips on how those resellers can implement a "keep it rule," allowing customers to keep the returned item. Love 'em or hate 'em?: What's in store for the future of self checkouts? How retailers are pulling back. Beitelspacher, the marketing professor, said retailers will allow customers to return an item on the theory that "the delight that you might feel might make you more of a lifetime customer." The cost of that item to gain the lifetime customer would be more than the cost of absorbing the cost for you to ship the item back, she said. But Beitelspacher also pointed out that Amazon's lenient return policies, while it may help shoppers have better feelings about Amazon, can hurt the many third-party sellers on the platform, who are actually taking the return hit. The dark side to retail returns There's a big difference between a shopper who takes advantage of a retailer's lenient return policy and criminals making a business of bilking retailers through returns – and consumers who participate. Some shoppers purposely buy an item and "wardrobe" it, or wear it with the tags on and then return it, which is arguably gaming the system, said Eyal Elazar, head of market intelligence at Riskified, a company that helps e-commerce companies detect and prevent bad behavior. But criminal rings also exist to defraud retailers and some consumers are participating in this fraud, he said. Real shoppers are using cyber criminals to handle the return process for them, but with a twist, said Elazar. The criminals scam the retailers using methods such as disappearing ink on return labels, which shows proof that some package was scanned in and on its way back to the retailer. When that package doesn't arrive, the criminal can put pressure on the retailer to still give the refund. The customer gets to keep the item and some of the refund while the criminal also gets a cut, he said. The criminals love this method since they don't have to put out any investment to buy stolen credit cards or stolen inventory and are still earning money from the fraudulent returns, Elazar said. This new return fraud really ramped up after the Covid-19 pandemic when people stopped needing to sign for deliveries and when retailers were trying to figure out ways to make consumers happy with the increase in e-commerce and returns, he said. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@ or follow her on X, Facebook or Instagram @blinfisher and @ on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
Axios
03-04-2025
- Business
- Axios
Scammers may benefit from ChatGPT's new image tool
Scammers could well be among those finding creative — and concerning — uses for ChatGPT's new image generator. Why it matters: Axios' testing of the new image generator found that the tool generates plausible fake receipts, employment offers and social media ads to invest in Bitcoin. Driving the news: ChatGPT adoption has skyrocketed since OpenAI's new image-generating tool launched a flotilla of AI-created art styled after Studio Ghibli, The Simpsons and The Muppets. Just as the images went viral, so did the examples for potential exploitation — including the ability to create fake receipts and forged cease-and-desist letters. Zoom in: While testing the new generator on Tuesday after it was made available to free users, I was able create some pretty basic images of fake receipts, job offers and advertisements for cryptocurrencies. When I created a fake receipt for two coffees at a Philz Coffee location, the tool originally created a pretty unbelievable version: It didn't have the company's logo or the unique names for the store's coffees. Even the address wasn't real. After some prompting, it was a bit more believable — and ChatGPT had no problem using Philz' copyrighted logo when I asked it to incorporate it. In further testing, ChatGPT created more fake documents that a scammer could find helpful. I asked it to produce an employment document showing someone had been hired to work at Apple as a software engineer, and it did so without any hesitation — even filling out the document with salary information and someone's name. ChatGPT also created an "advertisement for social media to invest in Bitcoin." Threat level: Hackers could use these generated images to lure victims into crypto scams or to assume someone else's identity and gain access to privileged systems. "It's no surprise that technology designed to help everyday users work faster also has very applicable use cases for bad actors looking to make their schemes more legitimate and convincing," Doriel Abrahams, principal technologist at Forter, told Axios in an emailed statement. Yes, but: I did hit some roadblocks. ChatGPT wouldn't let me create a replica of a New Jersey driver's license. When I asked ChatGPT to create an "an ID card for someone living in a real city in New Jersey and who was born in 2004," it told me it wasn't allowed, but that it could "create a generic template for an ID card that includes a fictional name, a real city in New Jersey, and a birth year of 2004." That ID card template was not super believable though (see below). Between the lines: ChatGPT's image generator appears to deal with the same prompt hacking problems that most consumer-facing large-language model grapple with. OpenAI has guardrails to prevent the most obvious examples of fraud and abuse, but scammers are already finding workarounds. An OpenAI spokesperson told Axios that while the company's goal is to "give users as much creative freedom as possible," it does monitor image generations using internal tools and takes actions when it identifies those that violate its policies. "We're always learning from real-world use and feedback, and we'll keep refining our policies as we go," the spokesperson said. What to watch: The researchers and cybersecurity vendors that Axios spoke to haven't seen any clear examples of fraudsters using AI-generated images from the new tool in their schemes — yet.
