'Free Returns' Policies Are Coming to an End — Replaced By This Other Approach That Could Divide Consumers Major retailers are getting creative to mitigate profit losses.
By Amanda Breen
Key Takeaways
- Seventeen percent of purchases made in 2022 were returned — and new return fees are the result.
- Eighty-one percent of surveyed retailers have begun charging for at least one return method in the last year.
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If your post-holiday plan involves sending back that less-than-perfect gift, you may want to brace yourself for a new reality: the end of the free return.
As return rates hit new highs — 17% of purchases made in 2022 were sent back — retailers including Macy's, Abercrombie, J. Crew, and H&M are among the many instating fees for mail-in returns, CNN Business reported.
Related: Major Retailers Are Considering Dramatic Return-Policy Changes
Eighty-seven percent of merchants reported an increase in return rates in 2023, and 81% of those surveyed have started charging for at least one return method in the last 12 months, according to Happy Returns, a logistics firm that works with online merchants to handle product returns.
Amazon is also tightening its return policy. Not only is the e-commerce giant instituting a $1 fee for returns at UPS Stores when a customer is closer to an Amazon-affiliated location, including Whole Foods, Amazon Fresh and Kohl's, but it's also adding a badge to products with abnormally high return rates, a spokesperson told CNN.
Retailers often have to absorb shipping costs for returns and mark down returned products for resale, which is hard on profits and the environment, with many returns ending up in liquidation warehouses or landfills, per the outlet.
As many as 9.5 billion pounds of returns ended up in landfills in 2022 — equivalent to 10,500 fully loaded Boeing 747s, according to an estimate from returns tech platform Optoro.
However, some stores are taking a different approach, allowing customers to keep or donate lower-cost items to offset the hefty price tag of return shipping. Fifty-nine percent of retailers surveyed by returns-services firm goTRG said they have adopted a "keep it" return policy "for returns that aren't financially viable to ship back."
