Wardrobing is a type of friendly fraud that occurs when shoppers deliberately return worn items.
A 2021 study by the National Retail Federation estimates that return fraud (which includes wardrobing) costs the retail industry $12.6 billion in lost sales.
So, how can you prevent wardrobing from affecting your ecommerce business? Let’s take a closer look…
Wardrobing is the act of buying an item and wearing it, only to return it later. Nearly 40% of shoppers admit to wardrobing apparel, shoes, or accessories—of which 58% earn more than $50,000 per year as “qualified, technical, or managerial'' employees. Shoppers wardrobe for a number of different reasons—they may:
The business impact on ecommerce merchants is significant. According to Gartner research, less than half of all returned goods can be resold at full-price once they make it back to the retailer. Additionally, wardrobing adds to the annual cost of processing returns and incurs the off-overlooked cost of missed sales to non-wardrobing customers.
Some realities to consider when it comes to the negative impact of wardrobing:
There are a number of steps you can take to limit the impact of wardrobing.
Establish a clear return policy with strict requirements
Having a clear return policy is critical because it allows you to integrate terms and requirements designed to mitigate the impact of wardrobing.
For example, you can include language that shortens your return window. Requiring customers to return merchandise within 30 days–as is considered ‘Standard’ among ecommerce merchants by the scoring rubric found in Narvar’s 2021 Return Policy Benchmarks report–lessens your chances of receiving returns out-of-season.
Or you can consider mandating all items be returned in unworn condition. Of course, consumers can still get around this requirement by hiding tags when wearing the merchandise, but it may give your company grounds to reject returns that show obvious signs of wear.
Include a strong inspection process in your reverse logistics workflow
Time is money, and this is as true when it comes to returns processing.
When receiving inbound returns, there’s a natural tendency to try to process items as quickly as possible in order to reshelve and issue refunds. That said, don’t let this need for speed affect the degree to which you inspect returned items—you don’t want to miss the subtle signs of wardrobing:
Look into anti-wardrobing tags
Anti-wardrobing tags are tags that are specifically designed to be difficult to replace or camouflage when wearing an item.
For example, large tags and security ribbons can be harder to conceal in pictures. Shark Tags don’t hinder try-ons, but are highly visible and impossible to replace once they’re removed from clothing items.
Blacklist potential wardrobers
Another option for reducing wardrobing is to simply block the accounts of shoppers you suspect of engaging in retail fraud. This can be done manually by reviewing customer records for abnormal patterns of return behavior, or it can be automated with AI-driven tools that flag wardrobing accounts (though customers may get around these bans by opening new accounts from different IP addresses).
The right approach to limiting wardrobing within your business should also be influenced by its impact on your operations. If wardrobing isn’t a major problem for your business, rolling out an expensive campaign to thwart it may not make much sense. Remember, you can always expand your approach as you grow or as you see signs that wardrobing is rising within your returns program.