Racial Discrimination by Retailers: A Field Study of Willingness to Accept Returns

44 Pages Posted: 8 Apr 2022 Last revised: 2 Dec 2022

See all articles by Meirav Furth

Meirav Furth

UCLA School of Law; Tel-Aviv University School of Law

Date Written: February 14, 2022

Abstract

Sellers often authorize their employees to deviate from the exact terms of their form
contracts when interacting with consumers. This study tests whether, when departing
from the letter of a seller’s form contract, salespeople treat white consumers disproportionately more favorably than similarly situated Black consumers. Nineteen testers
were recruited and trained to return more than 200 unworn clothing items to 59 retail
stores in Chicago. The testers tried to return the items without presenting a receipt,
although the stores had formal policies requiring a receipt as a condition to making a
return. The findings reveal significant racial disparities in the salespeople’s willingness
to accommodate the tester. In this study, Black testers were 7-8 percentage points
less likely than comparable white testers to obtain an immediate refund. Moreover,
white testers were 14-17 percentage points more likely to obtain any form of concession—refund, store credit, or exchange—than their Black counterparts. These racial
disparities in treatment persisted, and even widened, after the testers who were initially denied a refund then demanded to speak with management. When tested, these
results proved to be robust to various specifications and restrictions. These findings
suggest that there is systematic race discrimination in the enforcement of consumer
contracts.

Keywords: discrimination, consumer law, contracts, retail shopping, empirical legal studies

Suggested Citation

Furth, Meirav, Racial Discrimination by Retailers: A Field Study of Willingness to Accept Returns (February 14, 2022). Available at SSRN: https://ssrn.com/abstract=4034828 or http://dx.doi.org/10.2139/ssrn.4034828

Meirav Furth (Contact Author)

UCLA School of Law ( email )

Tel-Aviv University School of Law ( email )

Tel-Aviv
Israel
0524819151 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
177
Abstract Views
739
Rank
255,099
PlumX Metrics