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Women's Clothing Store Return Policy Analysis

Ramona's Clothing is a retail store specializing in women's clothing. The store has a liberal holiday return policy that allows returns through January with a receipt for cash or exchange. Items under $75 without a receipt are refunded in cash, while items over $75 without a receipt receive a mailed check. When items are returned, a clerk completes a return slip that is placed in a box for the store manager to later authorize. This year returns have reached an all-time high, including many under $75 without receipts.

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Muhammad Shahid
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139 views1 page

Women's Clothing Store Return Policy Analysis

Ramona's Clothing is a retail store specializing in women's clothing. The store has a liberal holiday return policy that allows returns through January with a receipt for cash or exchange. Items under $75 without a receipt are refunded in cash, while items over $75 without a receipt receive a mailed check. When items are returned, a clerk completes a return slip that is placed in a box for the store manager to later authorize. This year returns have reached an all-time high, including many under $75 without receipts.

Uploaded by

Muhammad Shahid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Ramona s Clothing is a retail store specializing in women

s clothing #6910
Ramona s Clothing is a retail store specializing in women s clothing

Ramona's Clothing is a retail store specializing in women's clothing. The store has established a
liberal return policy for the holiday season in order to encourage gift purchases. Any item
purchased during November and December may be returned through January 31, with a
receipt, for cash or exchange. If the customer does not have a receipt, cash will still be refunded
for any item under $75. If the item is more than $75, a check is mailed to the customer.
Whenever an item is returned, a store clerk completes a return slip, which the customer signs.
The return slip is placed in a special box. The store manager visits the return counter
approximately once every two hours to authorize the return slips. Clerks are instructed to place
the returned merchandise on the proper rack on the selling floor as soon as possible. This year,
returns at Ramona's Clothing have reached an all-time high. There are a large number of
returns under $75 without receipts.
a. How can sales clerks employed at Ramona's Clothing use the store's return policy to steal
money from the cash register?
b. What internal control weaknesses do you see in the return policy that make cash thefts
easier?
c. Would issuing a store credit in place of a cash refund for all merchandise returned without a
receipt reduce the possibility of theft? List some advantages and disadvantages of issuing a
store credit in place of a cash refund.
d. Assume that Ramona's Clothing is committed to the current policy of issuing cash refunds
without a receipt. What changes could be made in the store's procedures regarding customer
refunds in order to improve internal control?

Ramona s Clothing is a retail store specializing in women s clothing

ANSWER
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clothing/

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