What is Wardrobing and How Can You Stop It?

At its core, wardrobing is a type of first-party fraud. It happens when a shopper buys any item that they wish to wear or use just once, and then return it to get their money back.

This is a very common practice that significantly impacts the retail industry. According to the National Retail Federation, scams like wardrobing are estimated to cost the US retail industry around $13 billion lost in sales every year.

A 2023 survey by Signifyd/ Onepoll found that almost a third of buyers had made false damage or refund claims (32%). A sizeable 28% had returned merchandise because they had found a better price, while 27% had falsely claimed they had never received it.

Interestingly, this is just one fraud tactic; others such as refund services or tag switching have become a growing concern nowadays.

A recent study discovered that 1 in 5 buyers have engaged in wardrobing at some point. That’s not all, about 43% of buyers aged 16-25 will continue this trend in the future. The average seller loses around $10 to this refund scam for every $100 of returned items accepted.

What is Wardrobing in E-Commerce?

Wardrobing refers to a deceptive practice where consumers buy items to use them temporarily and then return them for a full refund. Essentially, it’s like renting merchandise without paying any fees.

The most common scenario involves clothing, accessories, or other products that can be worn or used once and then returned.

To many consumers, wardrobing may seem like a victimless act of crime. Many probably don’t even consider it a crime to begin with, perhaps justifying the act as forgivable if they do buy other items from the retailer… eventually. It helps them get a quick outfit for an event, and the seller gets the merchandise back. So, no harm, no foul!

The reality is different! Fewer than half of the merchandise returned to retailers makes it back on the store shelves at full price. Amazon and Sephora are tackling this issue by penalising consumers who are making too many returns by banning them from making any future purchases.

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The Thin Line Between Customer Convenience and Retail Fraud

In the growing world of retail, where convenience and customer satisfaction rule the business, you must strike a balance to prevent things going out of hand. Retailers work hard to offer seamless experiences, but this very convenience can sometimes open the door to abuse and fraud. Let’s take a look at the three different behaviours that have deeply affected the retail industry: Bracketing, Wardrobing, and Staging.

1. Bracketing: The Gray area

Bracketing is a practice that sits on the milder end of this spectrum. Here’s how it works: Customers buy multiple items, while choosing just one and returning the rest. In today’s “try-before-you-buy” time, this behaviour is quite expected. After all, the vast majority of us have ordered three dresses or shirts online, tried them all on, and then sent back the two that didn’t fit well? In fact, 46% of UK consumers admitted to bracketing last year, a jump from 41% in 2022.

While this seems harmless, it poses logistical challenges for retailers. Managing inventory, processing returns, and ensuring items remain in good condition becomes a difficult task. Yet, retailers believe that accommodating bracketing is essential for customer satisfaction.

2. Wardrobing: The Costly Trend

Wardrobing takes things a notch higher. Imagine a customer buying an outfit, wearing it to a special event, and then simply returning it for a full refund. This behaviour not only affects profit margins but also leaves retailers with used goods they can’t resell as new. The numbers are staggering: 26% of shoppers admit to this practice, and in the UK alone, it costs retailers a whopping £1.5 billion annually. Wardrobing is a financial headache that retailers struggle with, especially as e-commerce continues to thrive.

3. Staging: The Art of Deception

At the extreme end of this spectrum is staging. Imagine: Shoppers willingly buy high-end or designer items not for personal use but solely to create envy-inducing social media content. These items are paraded on TikTok, Instagram, and Pinterest, fetching likes and comments, only to be returned afterward. The motivation here is not to get genuine admiration but the desire for a perfectly curated online presence.

The culprits? Mostly 18–35-year-olds, who accounted for 30% of such staging incidents in 2022, and a similar rate in 2023. This fraudulent behaviour undermines retailers’ trust and profitability. Combating the behaviour is even more tricky. Whilst it is very possible to prove where staging has done, it would entail a level of privacy invasion and tracking most retailers would be too uncomfortable in embarking on.

How often do customers engage in fraud or return abuse?

According to our research, the good news here is that around half of customers never engage in returns abuse or fraud, nor are they aware of anyone in their lives who’s done so.

On the other hand, nearly five in 10 respondents claim that either they, or someone they know, has engaged in returns abuse or fraud within the past year.

To start, let’s dig into what behaviours are covered within that statement. The category is quite broad to include all of these fraudulent activities:

That’s just shopping online

• Ordering multiple items of different styles to try at home, treating your bedroom as a personal changing room, and returning items that don’t fit or suit you. In this scenario, the consumer believes they know their size and largely orders items that will in theory fit them.

Unfavourable consumer return-related behaviour

• Ordering one or more versions of the same item to try out knowing most will be returned (i.e. bracketing). The intention aspect of purchasing multiple sizes or colours of the same product makes this abuse-like returns behaviour but in reality isn’t always considered as malicious abuse by retailers nor consumers.
• Attempting to return an ineligible item (e.g., final sale item, past the allowed return window)

Abuse

• Posting about clothes on social media that you intend on returning (i.e. staging).
• Buying items with the intention of requesting a return but being allowed to keep the product
• Claiming that the purchased item is defective to receive a refund/discount

Fraud

• Using/ wearing an item with the intention of returning it after the fact (i.e. wardrobing).
• Returning less expensive items than the original item purchased by simply switching the price tickets.
• Purchasing items with a virtual credit card/stolen card, then attempting to have the refund processed to a different credit/debit card
• Claiming they never received an item to get a second product and/or a full refund

Our data shows that 46% of respondents had either engaged in one of these behaviours, or knew someone who had. In fact, around 20%- 30% of those who have committed such fraud or return abuse have admitted to participating in those behaviours at least once a week.

Why are Some Consumers Wardrobing?

The high inflation affects the affordability of goods and services for households in the UK. The cost of living has increased drastically across the UK during 2021 and 2022. Many shoppers are using wardrobing as a means to return their clothes and get back the cash that they probably need for survival.

Special Events

Cocktail parties, weddings, formal events, and interviews could be a reason for customers to engage in wardrobing. They could consider expensive items (prom dresses, bridesmaid dresses, ball gowns, etc) a luxury item they would use just once, and so, are fair game for returns.

Social Pressure

The drive to be always “on trend” is a big thing for some shoppers. It is the core driver behind the explosion of fast fashion in the first place. This is driven by social media influence. However, many social media influencers as well as their followers project a fake image of themselves to the audience.

Financial Shortfalls

The cost of living increased sharply across the UK during 2021 and 2022. So, the average person cannot afford to buy brand-new clothes every day.  

Let alone, buying designer clothes and accessories that cost from a few hundred to a few thousand pounds per item. Many shoppers then resort to wardrobing to maintain their appearance, especially during difficult economic conditions.

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How can I identify wardrobing?

Once you know what is wardrobing, the next thing is to identify it!

• Frequent or Successive Returns: Keep an eye out for those customers who make repeated returns. If a customer constantly buys and returns items, it could be a sign of wardrobing.
• Signs of Use: Pay attention to items that feel, look or smell like they have been used or worn. For example, clothes with visible wear, makeup items with signs of use, or electronics with fingerprints may indicate wardrobing.
• Missing Tags or Altered Tags: Check for missing tags or tags that have been, removed, altered, or replaced. Wardrobers often remove tags to avoid detection.
• Unusual Return Reasons: Be cautious if customers provide unusual or weird reasons for returns. Wardrobers might falsely claim defects or other issues to justify returning the merchandise.
• Patterns in Behaviour: Analyse customer behaviour over time. If someone consistently follows the same pattern of buying, using, and returning, it’s worth keeping an eye on.

How to deal with consumers who are wardrobing?

An easy, clear, and reasonable return policy is the first line of defence against wardrobing. Return policies allow you to set return rules discouraging wardrobing.

For example, you can claim that to return items, they must have the tags intact and must be unworn. This will generally be seen as a reasonable prerequisite for making return and is unlikely to cause upset amongst customers.

Return fees may include shipping charges and restocking fees to help offset the financial impact of wardrobing. As charging for returns becomes the norm for fashion retailers battling inflationary pressures and market challenges, an increase in return fees becomes a more viable strategy. It is worth taking it slow and testing your customers response to paid returns, rather than immediately charging them the full cost of returns and potentially scaring off customers.

Time limits are far more difficult to implement and less effective. Retailers are required to offer, by law, 14 days for the customer to signal their intent to return (and a further 14 to receive the return). ZigZag’s research found that 95% of consumers returned within just 7 days, so people are efficient when it comes to getting their refund. With next-day and even same-day deliveries, consumers can easily get an item for an event and return it within 14 days.

Anti-wardrobing tags are special tags put on clothes, accessories, and shoes to prevent wear and return practices. These tags, supplied by the likes of 360 ID Tag, Universeal, and Unisto mention to buyers that they must need to be intact for retailers to process the return.

For example, TJX Europe has implemented this feature across all stores throughout the world. They have introduced a red label tag on all Gold Label collections since they are quite expensive and don’t accept returns or exchanges without the red tag attached to the apparel.

The fashion retailer specifies “The item should be returned to the store it has been bought from, in its original purchased condition, with the red tag still attached and the receipt”.

How does wardrobing affect my e-commerce store?

Wardrobing has several negative effects on your e-commerce store:

Financial Loss: Refunds reduce your revenue and increase operational costs. The cost of returning a $50 jumper has been estimated to be $33, or 66% of the purchase price. These numbers highlight fraud returns as a massive challenge to the financial health of ecommerce businesses, especially for fast fashion retailers or small, family-owned businesses or e-commerce startups.

Reverse logistic Challenges: E-commerce businesses face inventory management and restocking challenges due to wardrobing. Identifying a used item during return processing is just the beginning, as the item cannot be resold as new and must be discounted, disposed of, or even sent to liquidators. This creates a ripple effect of out-of-stock notifications for honest customers.

We work with a number of marketplace resellers, recycling companies and charities to give clothes and shoes a second chance at finding a home. For example, ZigZag has recently partnered with JogOn to help stop one million unwanted running shoes from going to landfill.

What can I do to battle wardrobing?

In recent times, innovative fraud detection software and AI have made it possible for you to use anti-fraud tools, with less technical knowledge.

AI algorithms can analyse return patterns and identify potential wardrobing behaviour. By examining factors such as return frequency, item types, and return reasons, AI can flag suspicious cases. AI-powered visual inspection can even detect signs of wear or use on returned items.

You can read more about the uses of AI and machine learning in fraud detection here >>

Another way is charging customers for returns. High street fashion giant H&M has recently implemented a new online return policy. When customers return items purchased online, they are now required to pay a £1.99 fee for returning the items.

Several high-street stores—including Zara, Boohoo, Uniqlo, and Next—already charge for online returns. The movement towards paid returns makes it a safer option for retailers to use without risking losing customers. New recently moved to paid online returns without losing any sales and dropping return rates by 0.5%pt.

Does Wardrobing have something to do with my return policy?

Absolutely! Your return policy sets the tone for customer behaviour. By addressing wardrobing explicitly, you can minimise its impact.

When customers return items, the store associates or warehouse fulfilment crews are under pressure to process those returns quickly and return those to shelves. Don’t fall into this routine! This is the opportunity to spot the subtle signs that might exist showing the item has been wardrobed. Signs you may miss if the inspection is rushed.

Watch for signs the item has been used and returned, including: Damaged tags, reattached tags, dirt or debris present on shoes or fabric, etc.

Wardrobing FAQs

Is Wardrobing Illegal?

Wardrobing isn’t illegal, per se. However, it almost always goes against a merchant’s established return policy and is not supported by banks or card networks as a legitimate reason for a return.

Should I blacklist consumers who engage in wardrobing?

Perhaps the best option to respond to potential wardrobes is to blacklist those caught red-handed, at least for a certain period.

But blacklisting should be the last resort, instead, you must focus on soft preventive measures that don’t villainise your core customer base that will naturally return a lot anyway.

Is Wardrobing common?

Now that you know what is wardrobing, you must know that it is common in the e-commerce world and a growing trend.

Should I reject refunds to consumers who I suspect are wardrobing?

Always exercise caution. Investigate thoroughly before rejecting refunds.

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