How Relaxed Return Policies Can Hurt Retail Workers

Image courtesy of Geoff Fox

Generous return policies are great for consumers, since they give us a long time to bring back items that might be defective or that don’t fit. They also give great opportunities to fraudsters, though, and can hurt employees who get some or all of their pay through commissions, since they lose the commission when their employer loses the sale.

Sometimes that’s a good thing: employees who sell something by lying to or misleading customers shouldn’t get to keep their commissions from those transactions. The same goes for employees who sell items to their friends or relatives, knowing that the items will be returned later on.

The New York Times interviewed one Macy’s saleswoman who recounted that a bottle of perfume was returned to her department almost empty, yet the store accepted the return and she lost the commission.

The question of when a commission should be reversed is one of the points that Macy’s and its the union that represents its New York City-area employees are negotiating in the employees’ new contract. An extension of their current contract would expire tomorrow, and employees are threatening to strike, though changes to their health benefits are a bigger issue in the negotiations.

Still, knowing that commissions could be taken from them at any point up to six months after a sale means that salespeople can’t necessarily depend on predictable paychecks.

“When you have a return policy that says ‘We’ll take anything back anytime,’ well, then returns go up,” explained the president of Local 1-S, the union that represents 5,000 employees at four Macy’s stores in and around New York City. The union connected the Times with the perfume-selling employee who they interviewed.

Liberal Return Policies for Consumers Can Reduce Retail Workers’ Pay [New York Times]