Is there an "Owner's Manual" for processes Wal-Mart customer service associates must follow?

Before Christmas, I too was one of the many millions of customers who piled into many local Wal-Mart location looking for specific gifts. Now, in most cases I was witnessing consumer behavior more than actually shopping for holiday presents. For the past half-decade, most of my shopping has been done via mouse clicking. But still, observing the period from Black Friday to just after Christmas can give one great insight into the psychology of retail.

This past season, there were several smaller items that I purchased in order to perform some return transactions later. The point of buying something just to return it later was to test the returns process for similar and same items across several local Wal-Mart locations to find inconsistencies in the process from the moment I stepped in the door until the disposition of the transaction at the customer service desk. What I found made me think that 1) either there is no documented standards for the customer returns process, or 2) customer service associates are poorly trained (or not at all).

Items of the experiment

I purchased three items with the intention of finding out just how closely Wal-Mart personnel cared about checking on items returned for a refund. Or should I say, did not care about. This was not in an attempt to disparage the retailer, only find out what kind of processes were in place to check for customer abuse and other issues related to retail shrinkage. In Loss Prevention terms, this means ensuring all salable items remain in that condition (even returned items) to minimize loss to any retail operation.

The first item was a First Aid kit. These items generally contain aspirin, several small first aid items (like bandages and tweezers) and other minor medical equipment. In most cases, these items are sealed to prevent customer tampering (I think, anyway) and to seal the contents until purchased and used by the purchaser.

The second item was a pair of $99 diamond earrings. Now, I have to admit that the jewelry department associates that assisted me were very helpful. Since diamonds and cubic zirconium look about the same, the intent here was to return these earrings later and see what kind of inspection happened before I was issued a refund. Again, there is a pretty hefty difference in $99 diamonds and $9 cubic zirconium earrings. More on that later.

The third item was a $298 Everex desktop PC. This is the model that made headlines last summer as the sub-$300 back-to-school PC at a price point not many retailers could match. The purpose in buying a PC would be to see how much scrutiny Wal-Mart customer service folks would put forth for a $300 computer that would be eventually returned.

Performing the experiment

I returned all three items within a few weeks after the New Year's holiday to different stores from which each was purchased. Since all three items were bought at different Wal-Mart locations, returning each to a different location should have possibly added a layer of scrutiny to each return request I made. At least, that should have been the case.

On the first return, a small sticker was placed on the item as soon as I entered Wal-Mart's doors. This was basically a day-glo sticker from a price gun that had the current date stamped on it. Wow -- first of all, what is to prevent someone from taking that sticker off a $2 return item, placing it on a $100 item they grabbed from the shelf, and returning that $100 item (without a receipt, of course) for a $100 in-store credit? It's amazing that in 2008, this Wal-Mart location was using price stickers from the 1980s to tag return items.

Moving on, I approached the customer service desk and returned the First Aid kit, having taken off the shrink-wrap seal earlier so I could look at the contents inside. I could have stuck a small pillow in the case and returned it, or even contaminated the items inside somehow. Neither would have mattered, since the customer service associate who helped me didn't even crack the now non-sealed case to check the contents. I was promptly refunded my entire purchase price and left the store. Strike #1.

I arrived at the second Wal-Mart location with the aim of returning the $99 diamond earrings. At this Wal-Mart, I again was greeted nicely and my return item tagged with a date-coded price sticker. Once I approached the customer service desk, I was sent to the jewelry counter for my return. I gave some credit to Wal-Mart here -- there must be a policy of sending customers who need to return specialized merchandise back to the department where it was bought to have product integrity checked.

Once I arrived at the jewelry counter, the nice lady present there indeed said she could refund my money. However, the small earring box was glanced over for about a second before one of the earrings was pulled from the package to have the small barcode scanned for the return. I mentally note here that the actual earring was barely even looked at -- a counterfeit or cubic zirconium (or cheap, clear stone) could have been substituted for this return and not a Wal-Mart soul would have noticed. My refund was promptly issued and I was on my way.

Upon entering the third Wal-Mart location where I would be returning the Everex desktop PC, I was still shocked at the lack of checks and balances I had witnessed upon returning the two previous items. This was the king return though -- a $300 PC. I had opened the box but had not taken a single thing from it. Still, the box was opened and was clearly not factory sealed. Upon entering into the this third store, I was tagged with an actual barcode sticker printed right in front of me that identified the return item. No more generic price stickers tagging my returns -- this was a fraud-proof way of identifying what I was actually going to return. Kudos to Wal-Mart on this one, although it was surprising to not have all three Wal-Mart locations tag my returned items in the same way.

The customer service associate who helped me with this return was bright and pleasant -- and very much oblivious to the fact that I could have loaded the PC box with a few landscape bricks instead of an actual desktop PC. In fact, this associate did not even peer into the open box to ensure there was a PC inside... or a keyboard... or a mouse. Or, anything. Generally, returns are give 100% refunds if everything is in the box that came with the product when purchased. Not only that, but something as pricey as a PC should have been checked by someone trained to know what should have come in the box and to ensure nothing was missing. Not here.

Like I said, the box was not even looked at (even though it was clearly opened) except for the associate to find the barcode to process my return. I was amazed at this, actually. I've heard of customers buying products only to open them at home and find the old switch-a-roo having taken place. Now, it is easy to see how this happened -- many customer service folks just don't check packages when they are returned. I can't imagine how much completely preventable fraud -- shrinkage -- happens this way. Regardless, I was issued my refund and was on my way.

Note that the refunds in all three cases were made with cash (purposefully) so that there would be no record of who had purchased the item. From a thief's point of view, this is how retail fraud is perpetrated. All this at the world's largest retailer.

Shock and awe in the retail returns world

Although the purpose of all three experiments was to see just how lax the processes were when it came to returning items in three different price brackets, I could not help but feel shocked that returns on these items came so easily. No package inspections and a lack of adequate control just coming inside the premises were just a few of the security weaknesses I witnessed. All I can say is -- wow.

Next week, Target Corporation (NYSE: TGT) will be my 'special guest' in this column, as a perform the same experiment with the second-largest discount retailer in the U.S. to see what security checks are in place within the confines of Target. Until then, have a great weekend and stay tuned right here at this time next week for another edition of The Wal-Mart Weekly.