Best Buy opens hotline for customers denied returns

Best Buy has set up a hotline to field complaints from customers who believe they have been unfairly banned from making returns.

The company took the action after the Wall Street Journal reported that some customers were being denied the opportunity to return products for refunds.

Their purchases had been flagged as possibly fraudulent by an outside company Best Buy uses to try to detect shady returns. Customers complained that they were not able to clear their names.

Best Buy spokesperson Jeff Hayden said the retailer wants to set things right.

"On very rare occasions — less than one-tenth of one percent of returns — we stop what we believe is a fraudulent return," he said. "Fraud is a real problem in retail, but if our systems aren't as good as they can be, we apologize to anyone inappropriately affected and we will take a hard look at what we're doing and determine how we can make it better."

Fraudulent returns cost retailers big. In 2015, The National Retail Federation estimated that 6.1 percent of returns were fraudulent or abusive. That totaled nearly $16 billion.

Fraudulent returns can involve stealing a product from a store and then returning it for cash.

Since 2011, Best Buy has used a California company, The Retail Equation, to identify suspicious returns. That company said that about 1 percent of consumers exhibit return behaviors that could be fraud or abuse.

Best Buy said so far there have been few calls to the hotline — 866-764-6979 — it set up to field complaints about denied returns.

Tracking consumer purchases and returns isn't new, but it is troubling, said Susan Grant, director of consumer protection and privacy at the Consumer Federation of America.

"Essentially consumers are tracked without any notice or any understanding of the criteria on which the return policy will be based, and they have no way of challenging it if they think that they were unfairly treated," she said.

Grant said customers should be told before they buy something that a retailer may not follow its returns policy if it suspects fraud.

"If you're going to have a policy that only allows X numbers of returns within a certain time period, for instance, you should disclose that. Otherwise, consumers really don't know what the secret sauce is by which they're being judged," she said.

University of Minnesota marketing professor George John said Best Buy could better handle how it communicates with and treats people whose returns arouse suspicion.

"That's the PR disaster that Best Buy is facing, not so much what they're doing, [but] how they're doing it," he said. "All they have to do is basically say, 'Look, these are our return policies but we can suspend these polices at any time if you're in violation of XYZ.' And that's the problem."