Stores loosen policies to make it easier to return holiday gifts

— -- Stores and their shoppers are viewing after-holiday returns in a whole new light this year. Many retailers recognize that cash-strapped consumers will bring back more gifts than ever and have loosened their return policies.

The changes come after several large retailers in the past few years made it more difficult to return merchandise, especially without a receipt.

But more than half of retailers said their return policies would be more lenient in the few weeks following the holidays than the rest of the year, according to a National Retail Federation survey of its members.

"For once, many shoppers will be greeted with good news at the return counter," says Edgar Dworsky, founder of the public service resource website consumerworld.org. "The easing of some restrictions should make for many happy returns."

Given the focus on necessities over luxuries in this economy, it may well be the time to bring back that sparkly sweater that's so not you.

And despite the more lax policies, it still will pay to have that receipt handy, reminds Joe LaRocca, leader of loss prevention for the National Retail Federation. That's because a gift purchased in November might be selling for 75% less now, and the current price is all you'll get if you can't prove what was paid for it. As uncomfortable as it might be to call the gift giver and ask for a receipt, it might well be worth it.

Many retailers also have return policies that subject certain purchases, such as electronics, to stricter rules than say, clothing, Dworsky says. Computers, digital cameras and opened goods may be subject to limited return rights, restocking fees, shortened return periods, or no refunds at all, he says.

Target "technically offers no returns without a receipt but has an undisclosed policy of allowing a limited number," Dworsky says. Employees also will search Target's computer system for missing receipts, he says. Other retailers, including Sports Authority, Staples, Express and The Limited, use return-tracking systems to monitor an individual's return history, Dworsky says.

The Retail Industry Leaders Association's loss-prevention chief, Paul Jones, notes that all the information retailers gather on purchase histories can work to their benefit when it comes to returns. While some consumers bristle at privacy concerns, they may be doubly upset when stores refuse to take back gifts that the customer has repeatedly tried to return without receipts, he says.

"The more data on shopping habits, the better the return process will be," Jones says. "If a person gets a lot of gifts and spends a lot of money, that's still OK. Retailers have come a long way from turning people off from their refunds."

While many retailers, including Circuit City, have extended the period during which they will accept returns, Best Buy actually shortened it a week to Jan. 24. And the deadlines seldom don't go past late January, so it won't pay to wait.

If you're making a return to save money, keep in mind that retailers often use returns as a way to sell more. Jones says many retailers offer discount coupons with return receipts. It has proved to be a very profitable move, he says.

Gift cards, on the other hand, haven't fared so well. Sales are expected to be about $61 billion this year, down from $70 billion in the 2007 holiday season, research company Tower Group says.

Retailers like gift cards because consumers typically spend more than the card's value once they are in the store or on a website. Despite the slowdown, there are still millions of cards in consumers' hands, and many may be in no hurry to redeem them.

Even though most gift cards don't have expiration dates or fees anymore, this isn't the year to tuck them away in a drawer and forget about them. Bankruptcy or liquidation could lie ahead for some retailers, and that could mean they no longer honor the cards, so it's best to use them soon.

Use them wisely, though, suggests author Mary Hunt, the founder of the website debtproofliving.com. She says consumers who are concerned about finances should think twice before spending their gift cards on things they don't really need.

If you're going to have to buy someone else a gift soon, "regift the card" to save money, she suggests, or buy gifts for others with it.