Bloomingdale’s Will No Longer Lend You a Party Dress – Businessweek

A 3-inch chunk of black plastic is the hottest new accessory at Bloomingdale’s.

The tags, fixed to high-fashion garments in highly visible places, are the department store’s new strategy to keep crafty shoppers from buying clothes, wearing them, and then returning them. Once buyers remove the tags, Bloomingdale’s, a unit of Macy’s (M), won’t take back the garments.

Shoppers, for example, may find a “b-tag” on a $1,100 red leather dress along with a stern warning not to remove it and expect to return it.

So-called wardrobing is a relatively big problem in the apparel business. Retailers suspect that about 3 percent of returns last year involved used clothes, stolen merchandise, or some other form of fraud, according to the National Retail Federation. In a recent survey, 65 percent of retailers said shoppers had returned used products, while 97 percent said they had processed returns on stolen goods.

Susan Scafidi, a Fordham University law professor who specializes in fashion, says wardrobing has been exacerbated by social media. Call it the Instagram effect. “We love our selfies,” she says. “More items become single-wear, in effect, because everybody has seen you in it.”

Online retailers such as Net-a-Porter were first to turn to aggressive, prominent tags, according to Scafidi. Wardrobing is a particular challenge for them, she says, because items can be returned without the sense of obligation and guilt that comes with an in-store transaction.

Bloomingdale’s new tags are a fairly brazen move for a white-gloved store that caters to high-income buyers. Mark Ellwood, author of the upcoming book Bargain Fever: How to Shop in a Discounted World, says the tags are yet another obstacle to making a sale.

“In an era when the shoppers have all the power, the last thing you do is anything that might alienate them,” Ellwood says. “It’s the retail equivalent of not dating anyone until you’ve seen their STD tests.”

What’s more, retailers these days have more tools than ever to combat fraud. The industry has perfected smart receipts and other data collection that flag shoppers who return items frequently, according to Ellwood.

Nordstrom (JWN), a Bloomingdale’s competitor, has taken a far more relaxed approach to wardrobing. It has some tags required for returns, but they are paper and relatively discrete, according to spokesman Colin Johnson.

“Our experience is that if you treat the customer with respect, they respect you back,” Johnson told Bloomberg.

Marissa Vitagliano, a spokeswoman for Bloomingdale’s, declined to provide details on the tags, citing a company policy of not discussing return fraud.

Bloomingdale’s Will No Longer Lend You a Party Dress – Businessweek.

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