Are You Falling For This New Trick Being Used By Retailers?
Shopping these days amounts to some Cold War-level of psyops – at least from the retailer’s point of view. For consumers, we waltz into Target or Safeway without much thought other than finding what we need, and getting the hell out of there. But there is a tremendous amount of time and money spent manipulating you, and finding new and ingenious ways to get you to part with your money. And the scariest part? It works.
You may be familiar with the strategy of retail store layouts – that is, the way in which the physical layout and design of a retail space is meant to encourage you to buy more, without even realizing it. Then there’s the fact that people are very susceptible to impulse buys, so the strategic placement of certain products next to the check-out counter (like gum, soda, and candy), often leads to more sales.
It’s similar to how the casino industry works. There are no windows, no clocks, and no concept of time. You just keep feeding the beast, completely unaware that you’ve been playing for hours, and losing hundreds, or maybe thousands of dollars.
Clearly, there’s a lot more going on than just putting stuff on shelves, and hoping you’ll come buy it.
But there’s a new trick retailers have up their sleeves, and it’s ingenious in its simplicity. It’s the extension of return policies to allow for a longer window to bring unwanted or damaged merchandise back – which sounds great from a consumer’s standpoint, but is actually working out in the favor of retailers.
Researchers from the University of Texas-Dallas and University of Texas-Arlington published a study in the Journal of Retailing, investigating how return policies positively or negatively impact consumers’ decisions to return merchandise. Surprisingly, the more lenient a return policy a retailer institutes, the more merchandise it ultimately sells.
“The inherent belief is that lenient return policies are more likely to lead to purchases than to encourage returns,” the study says. “Overall, leniency increases purchase more than return.”
So, while it seems that retailers are throwing consumers a bone, in reality, they’re betting against you. They’re betting that we won’t return merchandise – which totaled up to $284 billion in returns during 2014 – and will instead hang on to stuff, and buy more. And they’re using lenient return policies as a ploy to take advantage. It’s pretty ingenious, and you have to hand it to retailers who’ve figured out a way to reduce the return rate during post-holiday surges, and in an era in which online shopping may be leading to more returns.
“The cost of dealing with returns affects the bottom line,” said Ryan Freling, a UT doctoral candidate, and one of the study’s primary researchers. “You want to look at the different dimensions of a return policy, because you may be able to manipulate the policy to achieve your goals.”
“In the pre-purchase stage, consumers might think about the costs and benefits of making a purchase,” he added. “If the return policy is lenient in scope — if a sale item can be returned —a consumer might say, ‘Oh this is on sale. It seems like a good value. I’ll buy it, and if it’s not the right color or fit, I’ll return it.’”
So there you have it. The ploy in action. And the frustrating thing about it is that consumers really have nobody to blame but themselves. Though some of us will make a return if we feel unsatisfied with a purchase, a lot of people are just lazy, and would rather hang on to an item than go through the hassle. Retailers know that, and are capitalizing.
It’s not really a nefarious scheme, and it’s hard to blame retailers for taking advantage of consumers’ psychological weaknesses. That’s really the underlying idea behind most marketing and advertising efforts, as well. But this is yet another form of manipulation that is meant to separate you from your money, and it clearly works.
The leniency in return policies can take a few different forms, be it longer windows to return an item (a bet that consumers will become more attached, and not return it), or stretching the policy to include items on sale, as mentioned previously. But the numbers show that retailers are winning, and the only real thing you can do, as a consumer, is to be aware of these types of measures, and make wise purchases.