How Retailers Penalize You for Returning Purchases

The world runs on algorithms, but as anyone with baffling Netflix recs knows, they're far from perfect yet. Some of that comes from simple human error, but other times, it's not so clear. Case in point: You can get banned from making returns at certain retailers, because you've… made returns in the past.

Both the Wall Street Journal (paywall) and Racked reported Tuesday on Retail Equation, a widely used service that tracks customer returns at stores like Best Buy, Sephora, and Home Depot. The software assigns a point value to different items and behaviors, not necessarily based on cost, but how likely the return is to constitute fraud. Particularly suspicious activity includes returning a high percentage of what you buy, returning an item outside the recommended window, returning too many items in a short period of time, and returning anything that tends to get stolen a lot.

That all seems well and good, until customers began reporting they were being flagged for innocent and good-faith returns made according to store policy. One man bought a number of different-colored cell phone cases, intending for his sons to choose among them as a gift; when he tried to return three unused cases at Best Buy with a receipt, he was informed that if he followed through, he would no longer be able to return purchases at any Best Buy for a year. "[Three] total exchanges account for $87.43," he wrote on Twitter, according to the Wall Street Journal. "I suppose losing me who just spent 5k on appliances over 3 cell phone cases is worth it."

For its part, Best Buy says it's set up a hotline for customers who feel they've been banned from returns unfairly. And if you're worrying about the spread of Retail Equation, there's one silver lining: The company doesn't share customer information between stores, so if you run into a return ban at one, it won't affect shopping at others. In the meantime, fingers crossed the algorithm cleans up its act soon.