A few weeks ago I posted on why habitually returning things to the store isn't a bargain.
I gave two main reasons why:
- It's a poor use of time. Returning stuff takes time — sometimes a lot of time. Time isn't free.
- You get on the store's naughty list and could be refused business in the future.
The latter point is probably the more convincing one. It's easier to imagine lost shopping privileges than it is to imagine lost time.
It's not difficult for stores to conduct a modest analysis of a customer's purchases in-house to determine their “get-it-worthiness” — the likelihood that they will keep a purchase that they buy. Look at total sales vs. total returns for the customer. If it gets too high over a reasonable period of time, axe them.
These days, I would expect just about any store to keep the data necessary to back their decision up to pull the plug on costly customers.
Some companies know an awful lot about how you return
I wouldn't have necessarily expected them to outsource this information to a third party — one that does it for many store chains.
Enter companies like The Retail Equation. Stores outsource their customers' return information with companies like The Retail Equation. In return, the stores get back a return profile that covers not only cost of the customer, but also serves to be an alert for theft and other criminal offenses.
According to the linked article from Today.com above, The Retail Equation does not offer to stores “cross-pollinated” return profiles, or return profiles to other stores. In other words, Best Buy only gets a return profile based on returns to Best Buy. That customer's returns to Home Depot don't factor in to what Best Buy receives for a return profile, and Home Depot cannot access the customer's return information to Best Buy.
One company in the mix, though, does know all of this information: The Retail Equation.
Do you really want all of that information out there if the rules change?
The confidentiality of the return information is held based on the business relationships that The Retail Equation has with the stores that buy its services. The way things are set up now, what happens in Best Buy stays in Best Buy.
Internal to The Retail Equation, though, isn't it plausible that they're experimenting on the database as a whole? Isn't it plausible that, internally, they're correlating all of a person's returns to all stores that provide return information to them — to create a “return risk score” based on all of a person's return behavior?
If they could predict with confidence that a particular customer would cost a store more than they'd be worth to the store, that would be valuable, wouldn't it?
The article didn't say anything of the sort, and I have no inside scoop on either what The Retail Equation does with the data internally, or what it plans to offer in the future. Another plausible scenario, of course, is that their services stay as they are.
But rules change all the time. What was kept private ten years ago isn't any more.
I bet that you've heard in the news about at least one time when Facebook “overshared” its users' information. Most companies step forward a lot more carefully than this. And I think they have every right to do so. It's their business to be able to predict how much they'll be able to profit off of you. They are within their rights to refuse to do business with you if you're costing them more than they bring in.
It pays to be a smart customer. It doesn't pay to be an abusive customer. In the future, word of who's an abusive customer might get out really fast — and these customers will have a tougher time returning anything — or being able to buy anything in the first place.
What do you think? Should stores be doing this — even if it means lower prices for everyone?
I do not have a problem with this because some people abuse the system. I rarely return things, but it is always a legitimate return.
My wife will sometimes buy two or three different things with the intention of only keeping one. I joke with her about it and how the stores must hate her, but in all honestly she does it so infrequently that I don’t think she’s near the top of anybody’s list.
Yeah, I try not to buy anything with the intention of returning it. I only do it when there’s a big disparity between what I thought I was buying and what I actually bought.
Very interesting. I had no idea that there were third-party return analysts (for lack of a better term) out there. Seems like this could be rather valuable data, particularly if integrated across retailers. Big data strikes again, I guess.
Yes. I’d be very surprised if they weren’t working on some integrated product and waiting for the right time to spring in on people.