Wear and return behaviour is something many have reported on previously, but how do you spot it? How do you deal with it?
When we think of someone stealing from high street retailers, we usually think of shoplifters. But a small number of customers have developed an ingenious pattern of fraud that eats up profit margins. These customers—less than one percent of all shoppers—regularly buy outfits they can’t afford, wear, and return them in depreciated condition.
Wear and return shoppers impact product depreciation and margin
On the surface these shoppers appear lucrative since they’re big spenders, but they account for between 10-15% of all returns. After refunds and the other costs to serve are removed - the retailer actually loses money or essentially has paid those customers to shop.
Our research shows that a persistent wear and return shopper can cost an individual store thousands of pounds every year. Even in tiny numbers, they drain millions of pounds from profit margins.
They appear lucrative - but even in small numbers they can drain millions from profits
The statistical sophistication of the Clear Returns model allows us to accurately identify these sneaky customers, and separate them from people who were legitimately dissatisfied with their purchases. This allows the retailer to detect fraud and put a stop to the revenue-sapping behaviour.
Better understanding allows better targeting to this group
By better understanding customers behaviour, retailers can also better target wear and return groups. These are definitely NOT the key segment you want to be offering free delivery or large discounts to regularly, they will only cost you far more in the long run!