NEW research has revealed that retailers can limit returns and save billions of dollars by incorporating AI into their return policy.
Target and Walmart have adopted stricter return policies as a response to theft, but including AI technology could help both the customers and the retailers.
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Under Walmart’s policy, people who do not have a receipt will have to show a valid government-issued photo ID in order to exchange the products or get a Walmart gift card.
However, with Target, any customer without a receipt will not get a refund or exchange.
Since 2020, returns have increased by 78%, with 10% of retail returns being fraudulent, according to the Engagement Strategy report.
These returns cost retailers $85billion a year, resulting in these strict policies.
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While stores like Target and Walmart instill harsher rules to help save money, it also hurts its reputation.
Limiting return policies has the power to discourage customers from shopping, according to Rise News.
This could result in losing long-time customers, and even pushing new customers to stores with more lenient return options.
However, research shows that AI-based return models can limit loss and improve the customer’s shopping experience.
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AI can analyze the shopper to create a receipt policy that responds to their actions.
This means the technology considers the frequency of returns, how many items they normally buy, and if they have a history of theft.
Having personalized recommendations can encourage shoppers to monitor their return habits without pushing them to shop somewhere else.
In a perfect scenario, those who are loyal customers who rarely make returns can occasionally make returns without a receipt, and those who are returning frequently will deal with stricter policies.
The U.S. Sun has reached out to Walmart and Target for comment.
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