Target has quietly made a significant update on its website amid a concerning trend that is draining the pockets of many retailers across the country.
After a recent report from the National Retail Federation revealed that U.S. retailers lost $101 billion in overall losses due to returns abuse in 2023, Target is letting shoppers know loud and clear that it can refuse returns if it suspects deception.
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“Target reserves the right to deny returns, refunds and exchanges including but not limited to prevent fraud, suspected fraud or abuse,” reads Target’s updated return policy statement.
A Target spokesperson confirmed with TheStreet that it has indeed adjusted the language of its return policy, but the policy itself, which states that most unopened items in “new condition” can be returned within 90 days, hasn’t changed.
There are many different ways consumers may conduct return fraud. According to the National Retail Federation’s report, 49% of retailers said they’ve experienced consumers returning “used, non-defective” products, while 44% said that consumers have even tried to return “shoplifted or stolen” merchandise. Also, 37% or retailers said that consumers have attempted to return products that were purchased on “fraudulent or stolen” payment methods.
The move from Target also comes after a plethora of its employees have recently taken to social media to complain about customers abusing the company’s return policy.
What is the point of having a return policy?
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Target battles alarming retail theft
Target has also faced some challenges in the past with retail theft in general. Last year, Target closed nine of its stores across four different states due to “theft and organized retail crime,” which posed a threat to safety and business performance.
Target CEO Brian Cornell later revealed during an interview with CNBC in November that the company will be investing in technology, and coordinating with lawmakers and industry partners to help tackle retail theft.
“We’re really pleased with how some of the local DAs (district attorneys) are responding,” said Cornell during the interview. “And our teams and other retail teams have actually been walking stores with local DAs to make sure they better understand the challenges we’re facing.”
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It appears that those efforts are yielding positive results for Target so far. During an earnings call on Aug. 21, which discussed Target’s second-quarter earnings for 2024, Target Chief Financial Officer Michael Fiddelke revealed that the company has successfully lowered shrink across its stores. Shrink is how much inventory a company loses due to theft, damage, etc.
“While our guidance assumes that the year-over-year benefit from shrink would increase this quarter, we've seen better-than-expected results in our most recent store inventory counts, resulting in a bigger-than-expected financial benefit in Q2,” said Fiddelke during the call.
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