Study: Merchandise returns account for nearly $270 billion in lost sales
Irvine, Calif. — Merchandise returns in 2013 cost U.S. retailers more than $267 billion in lost sales. That’s one of the findings contained in The Retail Equation’s 2013 Consumer Returns in the Retail Industry study, which analyzes results from the National Retail Federation’s annual survey on merchandise returns and the 2012 Canadian Retail Security Survey from The Retail Council of Canada National Retail Federation.
The report found that retail fraud and abuse accounted for $9.1 billion to $16.3 billion in the United States, an increase of 2.6% from last year.
“In the competitive world of retail, it is critical to understand how returns and return fraud reduce net sales and contribute to shrink – clear causes of lost profits,” said Mark Hammond, chairman and CEO of The Retail Equation. “The results within this report offer the industry’s best look at merchandise return policies and procedures, as well as potential fraud and abuse. This information can be used by loss prevention professionals to compare and contrast their own program results to those reported here, with an eye toward reducing losses.”
The report showed a 15% increase in employee collusion versus last year, from 80.7% to 93.1%. This implies that exception reporting systems are not sufficiently preventing this type of fraud, according to Retail Equation.
The report also revealed that four-out of five main tender types (e.g., cash, gift card/merchandise credit, credit card, debit card and check) showed increased fraud. In fact, fraud increases outpaced decreases by 42%.
Click here for a complete copy of the report.
Gordmans implements Oracle Retail solutions
Omaha, Neb. – Department store retailer Gordmans has implemented Oracle Retail solutions to improve the customer experience and deliver on its advertised promise that shoppers will find “something unexpected” with each store visit. Using Oracle Retail software, Gordmans is streamlining the supply chain that supports its expansion throughout the Midwest.
Gordmans implemented Oracle Retail supply chain planning and execution solutions as part of a business expansion strategy that includes adding 10 new stores in 2013 and boosting the performance of existing locations. The Oracle Retail solutions provide Gordmans with more immediate insight regarding customer demand and item performance as well as the tools to offer new assortments and provide customers with trending products, brands and designers. Gordmans is also using the Oracle solutions to enable a multi-distribution center operation and offer more diverse and compelling assortments.
“Without the Oracle Retail solution we could not have grown beyond our 78 stores, and we are on course to surpass 100 locations next year,” said Richard Heyman, CIO, Gordmans. “The Oracle solutions enable our multi-DC model and have transformed our business, putting us on course to drive better performance. We are leveraging Oracle to improve product selection, inventory turnover and our ability to respond faster to customer demand.”
Apple products popular as ever
Shoppers still love Apple products, as evidenced by record unit sales for the iPhone and iPad.
Apple sales increased 5.7% to $57.6 billion from $54.5 billion during the company’s first quarter ended December 28 thanks to record sales of its flagship products.
The company sold a record 51 million iPhones compared to 47.8 million last year and iPad sales increased to 26 million units from 22.9 million last year. The biggest percentage gain came from the Mac business where units sold increased to 4.8 million from 4.1 million.
The sales growth did not translate to the bottom line as net income of $13.1 billion was essentially flat with the prior year and gross margins contracted to 37.9% from 38.6%. Earnings per share increased to $14.50 from $13.81 due to share repurchase activity with totaled $7.7 billion during the quarter.
“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”
The company announced a $3.05 share dividend.