01/01/2005
Merchants are shaking their fists and putting their collective foot down to return and exchangeaholics, but by their efforts to stamp them out, they may be steering themselves in a dangerous direction.
Some retailers are using new software that logs certain customer information the first time the customer brings merchandise back to return or exchange it. By requiring the customer to produce a driver's license or State identification card to be swiped into a machine, the company acquires information such as name, address and birth date. It also gathers information about the transaction, such as date and store location, merchandise description, etc. The software then continues to track the types of transactions and number of refunds and exchanges the customer makes. All this is stored in the data base of the software manufacturer.
So far, so good. But when the data base detects unusual return or exchange activity on the part of a customer, the refund and exchange software's police step in. Instead of processing the return or exchange, the customer gets a notice instructing them to call a toll-free number for a copy of the report listing their return activity. They may, if they wish, also request an investigation of the rejected return.
Although customer and privacy right advocates object to these policies, retailers defend them as a defense against fraud. But aside from merchant concerns that use of this software may alienate some honest customers, Better Business Bureau president Bill Mitchell believes that the legality of denying refunds or exchanges in this fashion may be in question. "When you make a purchase," he says, "you make a contract. You pay the price and the merchant gives you what you paid for. Part of what the merchant offers customers is the right to return or exchange their purchases according to whatever policy they've posted, or, if nothing is posted, within seven days. If you return the merchandise within the time allowed and they now identify you as someone they don't want to accept a return from, they breach the contract if they arbitrarily deny you the refund or exchange."
The only way a business could deny a refund or exchange without breaching the contract, he says, would be to inform you, in writing, either at the time of the purchase or at the time they make the refund or exchange that ends their willingness to make any more, that they will not accept future refunds or exchanges from you.
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