A third of Brits using and then returning luxury items as UK inflation spike hits consumer pockets
As UK Inflation rises to 3.5%, new research from Forter reveals that nearly one-third (31%) of cash strapped Brits are abusing online flexible return policies to try or use expensive items – a trend that has significant financial implications for retailers in today’s challenging marketplace.
The research shows that “wardrobing” (using items and then returning them) has become a financial liferaft for many consumers struggling with the ongoing cost-of-living crisis and rapid spike in household bills. This is especially true in young adults aged 18-34 who are the most likely to take part in fraudulent behaviour, with 46% admitting they wear expensive items once before returning them.
“As household bills spike and wallets tighten, we’re seeing more and more consumers turning to policy exploitation as a way in which to weather the storm financially,” said Aaron Begner, vice president of Advanced Technologies at Forter. “The 31% of shoppers abusing return policies for expensive items represents billions in potential revenue impact for retailers already operating on thin margins in today’s economic climate”.
The research also revealed that this behaviour is directly tied to broader economic pressures Brits are facing:
Nearly half (49%) of U.K. consumers are deliberately buying more from retailers with lenient return policies specifically due to financial concerns
63% are relying heavily on retailer promotions and perks to allow them to make the purchases that they want
For retailers, this creates a tricky balancing act between maintaining policies that drive sales, not punishing good customers with strict policies, while also mitigating the financial drain of returns abuse.
With 52% of shoppers admitting to abusing returns policies in the last year, the financial impact is clear. However, retailers are between a rock and a hard place with 18% of shoppers having abandoned retailers altogether that made return policies stricter.
This suggests the potential customer retention risk at stake here. As a whopping 70% of consumers are pointing the blame at the retailers themselves for making it too easy to exploit these policies – retailers must really think carefully about how they manage this new wave of fraud.