Major retailers are implementing stricter return policies as they continue to combat inventory losses and fraud. Target has announced modifications to its return policy, following similar changes made by competitor Walmart, as both chains aim to address ongoing retail challenges despite strong holiday performance.
The Minneapolis-based retailer Target has updated its policy to explicitly state it maintains the right to deny returns, refunds, and exchanges, particularly in cases involving fraud or suspected fraudulent activity. While the company will continue accepting returns within a 90-day window for undamaged items, there are now more stringent requirements regarding receipt verification and item condition.
Under the new guidelines, Target will reject in-store returns that lack valid receipts, and certain merchandise categories, particularly electronics, may face shorter return windows. Additionally, items that show signs of damage or have been opened may be denied for refund or exchange.
This policy shift mirrors recent changes at Walmart, which reverted to its pre-pandemic return standards. Walmart’s policy allows customers four months to return unused and undamaged items with verified purchase history, with some flexibility for customers who can provide government-issued photo identification.
These policy adjustments come as retailers evaluate their performance following a successful holiday shopping season. Both Target and Walmart reported better-than-expected results for the period, with Target experiencing record sales and raising its comparable store sales guidance to a 1.5% increase for the fourth quarter. The company noted significant improvement in discretionary spending, particularly in apparel and toys, while maintaining strong performance in beauty and frequently purchased items.
Target CEO Brian Cornell previously acknowledged consumer spending patterns during the company’s third-quarter earnings call, noting that customers were becoming increasingly strategic in their shopping habits, seeking deals and stocking up when favorable prices were found. He also observed that consumers were allowing themselves occasional splurges on select items.
Similarly, Walmart demonstrated strong performance, leading to increased guidance for fiscal 2025, with improvements projected across net sales, operating income, and earnings per share following robust holiday sales.
Despite these positive indicators, retailers continue to grapple with inventory shrink – losses due to theft and other non-purchase related disappearance of goods. This ongoing challenge has prompted various security measures across the retail industry, including enhanced entry point security, reduced self-checkout availability, and increased merchandise lockup practices.
The return policy modifications represent retailers’ latest efforts to address fraud while maintaining customer service standards. These changes reflect a broader industry trend of implementing more structured and verifiable return processes to protect against losses while still accommodating legitimate customer returns.
The retail sector’s approach to managing returns comes at a time when companies are balancing customer satisfaction with loss prevention. While many stores have already implemented various security measures at point of sale and store entry, the returns process has emerged as another area requiring attention in the overall strategy to combat retail crime and protect inventory.
These policy updates indicate that major retailers are taking a more comprehensive approach to loss prevention, extending beyond
point-of-sale security to encompass the entire shopping experience, including the return process. As retailers continue to adapt to changing market conditions and security challenges, such policy adjustments may become increasingly common across the industry.