This year, many large retailers tweaked their return policies. Some companies shortened return periods, while others began charging a return or restocking fee. Some retailers allow free returns of items that are dropped back in-store but charge a fee if items are returned by mail.
Rising costs, lower margins, and high returns, mainly during the holiday season, have brought about a change in retail return policies. Giant retailers, who had never asked customers to pay for returns, have now added the feature in refunds or have limitations on stock that can be returned.
Narvar’s research says that more than 40 percent of retailers have started charging return fees. This is mainly due to the large number of returns that have been increasing as more consumers use online shopping, some of whom order items in different sizes and return the incorrect ones.
The National Retail Federation said that many retailers are now considering minimizing returns to streamline operations and lower costs. New return policies could also lower greenhouse gas emissions as well as appeal to customers who focus on sustainability.
Many fashion retailers are among those who have started to charge customers for returns. Some popular brands that have started charging for returns include the following:
H&M
Abercrombie & Fitch
American Eagle Outfitters
J. Crew
Zara and many others.
Amazon, which was a pioneer in free returns, has started charging consumers a $1 fee for customers who return specific items to UPS stores.
Customers who return goods to brick-and-mortar stores might not pay a return fee, but those who mail back merchandise might have to pay shipping charges.
The National Retail Federation has reported that the return was 16.5 percent in 2022, while it was much lower at 10.6 percent in 2021. This cost retailers over $800 billion. Many retailers have taken another look at their return policies and have partly changed them to avoid such huge return losses in 2023. This year, margins are squeezed, and sales figures have changed as non-essential spending has declined.
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