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Smart Buying

Wear It Once and Request a Refund?

Knight Kiplinger answers questions about returning used clothing and charging personal expenses to a business account.

I have a friend who habitually buys expensive clothes, wears them once to a fancy party, then reattaches all the tags and returns them to the store, as if unused, for a refund. What do you think about this?

As I see it, anyone who "buys" products with the intention of using them and then returning them is stealing that one-time use from the store. Sadly, I hear from friends in retail that this practice is quite common -- and not confined to apparel. It has led many stores to accept returns only for store credit, not a refund. So who gets hurt in the end? All the other customers.

My sisters and I are shareholders in a closely held firm founded by our late father and now run by our brother. We suspect that he is charging some personal living expenses (such as nonprofessional travel and entertainment) to the business, which diminishes its profitability and our dividends. What should we do?

If true, it is not only unethical but illegal, and it could get your business into trouble with the IRS. Ask your brother about it, raising your concerns in a courteous way that presumes nothing. If you are not satisfied, exercise your shareholder right to examine the books and commission a professional audit.