REI is now not accepting returns from a “small subset” of its members who have repeatedly abused its return policies, the company confirmed to Retail Dive via email.
Members have up to one year to return most items, while nonmembers have 90 days. The company may accept a return without a receipt if it was purchased using a membership.
However, according to REI, a limited number of people have abused the company’s return policy. That group had an average return rate of 79%. They returned $2,400 worth of gear in the past year and $1,400 of that product was used, a spokesperson said. As a result, while those members may still shop at REI, the company said they will no longer be allowed to make any returns or exchanges.
“We’ve tried to curb this behavior by some members over the past several years with targeted warnings and probationary periods,” the company told Retail Dive in a statement Friday. “Unfortunately, these tactics have not proven effective.”
The outdoor retailer and cooperative said that while the people in question make up less than 0.02% of its 24 million members, they “have demonstrated a clear abuse of the return policy, as determined by an established pattern of transaction history and damage.”
On its website, the co-op says the exceptions, “ensure that every return or exchange is handled with fairness and protects the integrity of our membership and customers.” REI accepts returns of new items in stores or by mail with proof of purchase, regardless if they were purchased in store, online or by phone.
While the business doesn’t announce quarterly results, in April, the cooperative reported $3.76 billion in revenue in 2023, down 2.4% from the prior year. However, REI also incurred a $311 million net loss last year due to investments in hourly employee pay; its commitment to providing member rewards; and a $169 million noncash valuation against its deferred tax assets.
The company has 181 locations in the U.S. In October, the retailer said it plans to go forward with plans to open six new stores next year. It also plans to invest in its existing store fleet to improve the customer shopping and employee workplace experience, REI said last month.
According to a report by the National Retail Federation, the industry lost a total of $101 billion as a result of return fraud or abuse in 2023. According to the report, which included survey data, the top three types of return fraud were returning used, nondefective items; returning stolen or shoplifted merchandise; and returning items bought with fake or stolen payment information.
