Return Tracking and The Consumer Privacy Issue

By: Brandon P. Reilly | Donna L. Wilson
– Retailing Today

A recent string of media reports has focused on major retailers that track customers who return merchandise. While the plaintiffs' bar and the media are seeking to transform return monitoring into a headline-grabbing consumer privacy issue, the practice is hardly new, it is certainly justified as an anti-fraud measure and any litigation or compliance risk should be mitigated by appropriate disclosures.

Faced with estimated losses in the tens of billions as a result of return fraud, retailers have responded with increasingly robust tracking procedures that allow the creation of "return profiles" for each customer returning merchandise to a particular retailer. Return profiles typically include consumers' basic identifying information, as well as the frequency and volume of their returns at a specific retailer. If fraud or other misconduct such as "wardrobing" is suspected, the retailer may issue a warning to the customer or simply refuse to engage further in any return transaction.