Stores Brace for That Other Holiday Ritual: The Christmas Gift Return : Retailing: Many shoppers will head to malls today, one of the year’s busiest. Most places have liberal exchange policies.

It’s almost as much of a holiday ritual as putting up the Christmas tree or sipping eggnog.

After buying everything from designer shirts and terry-cloth bathrobes to Power Ranger action figures for Christmas, many shoppers will be heading to the malls today loaded with gifts to return or exchange.

Edward Nugent says he prefers to take back gifts right after Christmas. “You wait [too long] and they don’t have your size or it’s out of stock,” said the 29-year-old Irvine salesman.

“The crowds are enormous” on the day after Christmas, said retail analyst Richard Giss, a partner with Deloitte & Touche in Los Angeles. Returns can be painful for retail clerks, who stand to lose commissions when shoppers exchange gifts for cash. Said Giss: “It’s like undergoing a root-canal.”

Experts don’t have solid figures on how much merchandise is returned, but they say stores can spend the bulk of their time this week accommodating an unrelenting stream of shoppers seeking to exchange unwanted gifts for cash or other goods.

“It’s hell,” sighed one saleswoman, who works for a major department store in South Coast Plaza in Costa Mesa.

After enduring the hectic holiday shopping season, sales staffs are expected to show up in full force this week to deal with shoppers who bring back sweaters that don’t fit, computer games that they already have or furnishings that clash with the living room carpet.

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Salespeople say they get particularly frustrated with customers who insist on a refund for gifts that obviously were purchased from a competitor.

“I think we tend to bend over backward,” said Kim Cossack, manager of Imaginarium, an educational toy store in Newport Beach. “But people can become short with you. If they try to get cash back without a receipt, they’re not going to get it.”

The Target store in Irvine tries to maintain generous exchange rules, but customers have been known to test the store’s policies, said manager Jeff Biddle.

Some shoppers have marched in with appliances and toys, insisting that the goods were purchased at Target--until a clerk found a Kmart or Wal-Mart tag inside. “They really get embarrassed,” he chuckled.

“We sometimes make the exchange anyway,” Biddle added.

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Experts say retailers are walking a fine line. Merchants want to hold onto their critical holiday sales, which frequently account for more than a third of the year’s revenue, but they don’t want to alienate customers with rigid return policies, said Ira Kalish, a retail economist with Price Waterhouse in Los Angeles.

“If they do it right, they don’t gain anything,” he said. “But if they do it wrong, they could lose a lot of customers in the future.”

By law, retailers do not have to accept returned merchandise unless the items are defective, said Robert Raymer, an analyst with the attorney general’s office in Sacramento. “The purchase and sale transaction is complete at the point the person pays and takes the goods,” he said.

Most department stores, however, allow shoppers to exchange goods for cash or another item, even if they can’t produce a receipt. Smaller chains usually allow cash refunds for a limited time--with the receipt. Family-run or specialty stores that operate on narrow margins generally won’t provide cash refunds, retail analysts say.

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“It has become the norm for large stores to allow for [easy] return policies,” said Michel Tuan Pham, a consumer behavior expert at Columbia University’s business school. “As soon as stores are less lenient, the store opens itself up to negative publicity.”

Julie Kuns, manager of Nordstrom in Costa Mesa, agrees that stores need to be as accommodating as possible toward shoppers who are bringing back gifts. “Returns are part of retail,” she said. “We want them to feel at ease and to come back.”

Indeed, some retailers view the shopper returning with a gift as an opportunity rather than a problem.

Saks Fifth Avenue in South Coast Plaza is offering cash and other incentives to salespeople who persuade shoppers to exchange gifts for more expensive items.

“We don’t want our sales associates running away when they see a load of boxes coming back,” said Judy Bullockus, general manager of the Saks store.