It you want to return that ugly sweater your aunt gave you as a gift, you might need to read the store’s fine print.
Among retailers, 6 in 10 have changed their returns policies this year, shortening the time frame shoppers have to send an item back, charging fees, or telling shoppers they’ll have to cover the shipping costs themselves, according to goTRG, a logistics company focused on returns.
“Most consumers expect free shipping … and a lot of consumers expect free returns as well,” says Ray Wimer, assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management. But “you’re paying for shipping twice if you’re the retailer, and you’re losing the sale if they returned the items, so it’s a costly process.”
One exception to the new rules is the holiday season when many retailers are widening the window for shoppers to make a return.
Old Navy, Gap and Banana Republic for instance went back to a 30-day returns window this summer after temporarily extending the policy to 45 days during the height of the pandemic. But purchases made online or at a store from Nov. 1 through Christmas Eve can be returned through Jan. 15.
Still, there are changes shoppers need to be aware of as they contemplate returning gifts and other purchases come January, and beyond.
How long do I have to return Christmas gifts?
Returns windows were already widening over the past decade, as some retailers gave shoppers several months or more to send back merchandise to better compete with online rivals like Amazon. Then, during the COVID-19 pandemic, retailers offered homebound Americans extra time to return items they couldn’t try on or see at an actual store.
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But many are now shrinking their returns time frames, typically to 30 days, to winnow the mountain of merchandise shoppers send back and give stores a better chance to resell returned items before they go out of season, retail experts say.
Retailers are also increasingly telling shoppers that they’ll have to pay if they want to send an item back. Among 300 retailers surveyed this year, 36% said they do not offer free shipping on returns, double the number that refused to cover those costs last year, according to Inmar Intelligence, a data and technology solutions company focused on manufacturers, brands and healthcare companies.
Why are retailers changing returns policies?
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Handling returns costs retailers a lot of money, chiseling away at their bottom line.
Over $761 billion in merchandise was returned last year – nearly 17% of all retail sales, according to the National Retail Federation, an industry trade group.
“With the pandemic, people were obviously given some really generous return policies” from long returns windows to free returns, says Erin Halka, a retail strategist at supply-chain technology firm Blue Yonder.
And with the rise of online shopping, consumers have gotten used to a practice called “bracket buying” where they’ll order varying sizes and colors of the same outfit, sending back what they don’t like or doesn’t fit.
But all those returns are burdening a bottom line already strained by the rising costs of fuel and labor.
On average it costs a retailer roughly $15 per returned item, including what they pay for shipping, reprocessing and the labor necessary to get the clothing, appliance or piece of furniture ready to be resold, Halka says.
“If a retailer has been offering free shipping and returns, that’s a lot of cost in that good that the retailer is eating,” says Thomas Borders, general manager of the product lifecycle cloud at Inmar Intelligence.
According to Inmar, 31% of retailers forecast between 11% and 20% of the merchandise they sell this holiday season will be returned, while 16% expect between 21% and 30% of items they sell to be sent or brought back.
Those items often have to be heavily discounted, perhaps by 30% or 40%, says Andrew Hogenson, global managing partner of retail, consumer goods and logistics for Infosys Consulting. And if it’s out of season, a retailer may not be able to resell it at all.
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Are free returns going away?
Some retailers, like Kohls, require shoppers to cover their own shipping costs. Many others however are charging a restocking fee, or deducting the cost of shipping from a customer’s refund, Borders says.
“Some of those restocking fees are a fixed amount,” he says. “Other retailers are doing it (as) a percentage of the retail value of the item, where maybe they’re only refunding you 95% of the total purchase price.”
Can I still get a refund?
While many retailers continue to offer refunds, retailers are increasingly offering store credits instead “so it won’t be a complete lost sale,” Borders says.
Fewer returns, less waste
The tweaked returns policies are not only a matter of dollars and cents. They can have an environmental impact as well, reducing waste by lowering the amount of packaging shoppers need to use to send items back.
“It’s things like that that will help reduce the overall cost of the supply chain,” Borders says.
What should I know when making a return?
Tip No. 1 for shoppers this holiday season is to read a store’s returns policy so they know how much time they have, experts say.
Then, don’t procrastinate. Decide whether or not you want to keep that gift or purchase so you don’t miss out on the chance to get a refund, a store credit, or to exchange it for something else.
“When it comes to the holidays, we all lose track of time and we’ll find it’s Jan. 15 and the deadline was Jan. 10,” says Hogenson. “Think post-holidays, ‘Am I happy with this purchase? Am I going to keep this purchase?’ Don’t just have it sitting in a closet.”
Also, if you can, return that jacket or air fryer to an actual store since most retailers don’t charge a fee when an item is returned in person.
“Oftentimes it’s easier to do that than … finding a box (and) dropping it at the UPS store,” Falkas says. “Some (retailers) have special lines for returns so it’s speedy and efficient.”
And when shopping online, look at product reviews or visit sites that have clearer imagery so you have a more accurate idea of what you’re getting before you buy. Crate & Barrel for instance enables shoppers to use augmented reality to see what an actual piece of furniture will look like in your home.
Follow Charisse Jones on Twitter @charissejones
Story Credit: usatoday.com