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A relatively small number of purchase and return metrics can accurately predict customer profitability -and the likelihood of policy abuse. By using analytics to identify the few customers who cost the company the most money by abusing return policies before they make their next purchase, companies can prevent abusive returns, avoid PR disasters, and boost their profitability.

Retailers have long assumed that bigger is better: megastores mean broader product selection and lower operating costs. But by networking smaller stores, retailers can replicate big-store advantages and offer shoppers greater convenience.