‘Short-Term Rental’ Season Is Upon Us

Have you ever just borrowed something from a store instead of outright buying it? Apparently, this behavior is widespread and known in the trade as a “short-term rental” or STR. The practice involves consumers buying goods such as houseware, electronics, and clothing, fully intending to return them for a refund from the store after use.

According to a Lending Tree survey, nearly 40% of consumers admit to “borrowing” retail goods.

While not illegal, the practice is not only frowned upon by retailers, it actually hurts their businesses and has a fraud element attached to it with many causes, including lenient item return policies.

Local retailers are hurt more by these practices than large chains that can absorb the losses. Such costs during Q4, when STR is rampant, will also heavily impact Q1 ’26, according to Appriss Retail.

Bryant McAnnally, Strategic Customer Success Manager, Appriss Retail, explains more.

How significant is the “borrow-and-return” trend for local and regional retailers compared to national chains?

Because customers may have a harder time returning an item at some stores than others, fraudsters will pay close attention to return policies. Department stores and grocery stores tend to have more lenient policies, while apparel, luxury, or high-end retailers tend to be stricter. Additionally, national chains have budgets and staff to support implementing advanced analytics and fraud prevention programs that local stores cannot afford to implement.

What kinds of products or categories are seeing the biggest spike in “use-then-return” behavior this holiday season?

Commonly called “wardrobing,” apparel for holiday parties, family photos, vacations, and ugly sweaters keeps this a leading category. However, we see strong increases in “rental” categories such as kitchen tools and appliances, electronics, seasonal party supplies, and décor. With many family and social gatherings happening in the next six to eight weeks, shoppers will “borrow” items that can enhance an event or fill a one-time need, such as dishware for Thanksgiving or a sound system or new television for that Super Bowl party. Unfortunately, these “use-then-return” purchases take merchandise off shelves, creating out-of-stock situations that frustrate loyal shoppers looking for those same items.

How does invisible shrink from wardrobing affect local retail economies, especially independent stores that can’t absorb the losses as easily as big-box chains?

Invisible shrink is stealth and quietly erodes profitability, especially for independent retailers, where every return affects resale value, staffing needs, and cash flow. With limited inventory, they don’t have the same markdown flexibility or centralized distribution systems as national retailers. A “gently used” short-term rental return might end up as a total loss. Over time, those hits reduce inventory investment and can limit how much local retailers can reinvest in their business.

Are Gen Z and millennial consumers driving this trend equally across regions, or do you see regional differences in attitudes toward Short Term Rental (STR) behavior?

Gen Z and millennials drive these behaviors, often seeing “borrow-and-return” as budget-friendly or sustainable. Economics plays a large role in the areas where this behavior is most predominant. Community-based consumers tend to be more conscious of the impact fraudulent behavior has on small businesses. In metropolitan and college-town markets, where e-commerce and fast fashion are dominant, STR-like behavior is viewed more casually, almost as normal.

How are retailers adjusting their return policies to balance customer satisfaction with preventing abuse, especially during peak local shopping seasons?

Retailers don’t want to alienate honest customers, but they also can’t afford to let policy loopholes drive losses. By using machine learning to analyze behavioral patterns, technology can help create “smart” return thresholds that flag suspicious behavior, without changing the experience for everyone else. For example, someone who regularly buys, uses, and returns high-ticket items during key events might be prompted to exchange rather than refund, or be offered store credit instead of cash.

Could AI-driven loss prevention tools be used not only to flag serial returners but also to personalize messaging or incentives to change that behavior?

Absolutely. Advanced loss prevention systems can monitor for and identify misuse and promote engagement. If a shopper is flagged as a frequent returner, AI systems can tailor responses that educate or incentivize behavior change. For instance, a message might highlight sustainability (“Fewer returns mean less waste”) or offer a loyalty reward for keeping items beyond a certain window. The key is turning short-term rental insight into action without alienating valuable customers.

How might STR behavior influence local marketing campaigns that encourage buy-and-keep over buy-and-return?

Marketing teams now have an opportunity to double down on local storytelling that reinforces product value. Data-informed loyalty emails and geo-targeted campaigns that spotlight durability, rewards, or limited-time perks can shift perception from “borrow and return” to “buy and benefit,” strengthening both brand trust and lifetime value.

Do you see holiday events or community-driven retail promotions (e.g., Shop Local Saturdays) as opportunities to educate consumers about the hidden costs of STR behavior?

These are opportune times to remind customers that “buy local” also means “support local.” By this, we mean showing the positive benefits of supporting a community-based store and emphasizing sustainability, fairness, and community impact without shaming shoppers, which is key. Special recognition days such as Shop Local Saturday or Small Business Saturday are perfect times to remind customers what a difference loyal shoppers make on social media and with in-store or online promotions.

Looking ahead to Q1 2026, how should local and national retailers prepare operationally for the aftershocks of increased Q4 returns and reverse logistics costs?

Retailers should already be planning for a surge in returns and exchanges that begin on December 26th and run through January. That means staffing up early, coordinating logistics partners, and leveraging analytics to forecast volumes by category and region. From an operations perspective, proactive communication with suppliers about restock cycles and markdown plans can help cushion the impact. For many, Q1 success depends on how efficiently they manage the post-holiday “return hangover.”