An increase in gift return is always closely monitored during holiday shopping season.
This year, however, it might be more difficult to bring them back for free or at low cost.
A recent survey of retail executives found that 60% of retailers are changing their returns policies. Fewer promises free returns.
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According to the National Retail Federation’s latest data, retailers can expect 18% or $158 million of merchandise sold during holiday shopping seasons to be returned.
The return rate for 2021 was 16.6% of U.S. total retail sales or $761 billion in returns. In 2022, fewer businesses will be able afford such a high price tag.
Many retailers are changing their return policies due to rising costs and shrinking margins. Some have reduced the return window or even charged a restocking fee. Spencer Kieboom is the founder and CEO at Spencer Kieboom. Pollen Returns, a return-management company.
Expect shorter return windows, restocking fees
While preparing a vehicle to be delivered at a United States Postal Service processing center in Washington, D.C., a letter carrier holds Amazon.com parcels.
Andrew Harrer | Bloomberg | Getty Images
Gap, Old Navy and Banana Republic are just a few of the stores that carry J. Crew, once a well-known store for its generous return policy which lasted the life of a garment, has shortened its regular return window to one month. J. is offering a reprieve for year-end shoppers. Crew and other companies are offering extended holiday exchanges and returns.
Anthropologie offers REI and L.L. Bean (which also once promised lifetime returns), there’s now a fee — all around $6 — for mailed returns.
Kieboom stated that these adjustments to return policies do not cover costs. “They are there to discourage the consumer from returning.”
Margins are being squeezed by rising costs
Blue Yonder senior director Erin Halka stated that “free returns” was a highly valued convenience model for customers during the pandemic. It is now more expensive for retailers to maintain, due to higher shipping and labor costs.
She stated that charging returns is one way of covering a portion. Customers may be discouraged from buying too many goods, as at least 10% cannot be resold.
Kieboom explained that retailers often struggle with excessive inventory. “Often returns don’t end up back on shelves,” which can cause a problem in retailers who are trying to cut costs and improve sustainability.
The supply chain is intended to move in one direction.
Lauren Beitelspacher
Babson College Associate Professor
Lauren Beitelspacher (associate professor and chair, Babson College’s marketing department) stated that “the supply chain is designed for one direction.”
Beitelspacher stated, “The more money retailers lose in returns, the more they have for that by raising prices.”
“Changing the return policy for customers is easier than increasing the purchase price.”
How to avoid paying return fees
Despite this, online shoppers still love free returns as much as free shipping. According to PowerReviews’ recent survey, 98% said free shipping was the most important factor when shopping online. Then, more than three-quarters agreed that free returns were equally important. Even more wealthy shoppers are likely to support a free return policy.
Experts recommend that you get to know the policies and whether the return option is available. Halka stated that it is often not obvious. “You usually have to look into the fine print.”
She stated that there will be limitations on what can and cannot be returned. “A 30-day window of opportunity is common.”
This is a good time investment to make the best purchase decision. Kieboom explained, “You must find the best return policy.”
Beitelspacher suggested that shopping in person could be a way to avoid return hassles. “The majority returns are caused by regret over something that wasn’t what we expected.” She said that shopping in person reduces the expectation-reality gap.
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