In this article, you will get all information regarding Don’t count on free returns: 60% of retailers offer stricter policies – Digital Tech Blog

The holiday shopping season is always followed by a spike in gift returns.

But this year, it can be difficult to return things for free or for a low cost.

Nearly 60% of retailers said they are making changes to existing return policies, with fewer promising free returns, according to a recent survey of retail executives.

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On average, retailers expect to return about 18%, or $158 billion, of merchandise sold during the holiday shopping season, according to the latest National Retail Federation data.

For 2021 overall, the return rate was about 16.6% of all US retail sales, or $761 billion in returned merchandise, and in 2022 fewer companies are in a position to afford such a steep price tag.

With rising costs squeezing profit margins, many retailers are rethinking their returns policies, shortening the return period, and even charging returns or restocking fees, according to Spencer Kibum, founder and CEO of Pollen Returns, a returns management company.

Expect shorter returns times and restocking fees

A letter carrier carries Amazon.com packages while preparing a vehicle for delivery at the United States Postal Service Processing and Distribution Center in Washington, DC

Andrew Harrier | bloomberg | Getty Images

Stores like Gap, Old Navy, Banana Republic, and J. Crew (once known for their generous return policies that span the life of garments) have shortened regular returns to within a month. However, end-of-year shoppers are being given some reprieve: J. Crew and others are currently offering extended returns and exchanges for the holidays.

At Anthropologie, REI, and LL Bean (which also once promised lifetime returns), there is now a fee—about $6—for mailed returns.

“These adjustments in return policies are not there to cover costs,” Kibum said. “They are really there to deter the consumer from coming back.”

Rising costs squeeze margins

With the explosion of online shopping during the pandemic, “free returns have been a very convenient model that the customer has appreciated,” said Erin Halka, senior director at supply chain management firm Blue Yonder. Now, with labor and shipping expenses soaring, it’s costing retailers an “enormous amount of money” to keep going, she said.

“Charging a fee on the proceeds is one way to cover part of that cost,” she said. “It can also prevent customers from over-buying. At least 10% of the returned goods cannot be resold.”

Just as retailers struggle with overstocking, “the proceeds often don’t end up back on the shelf,” Kibum said, and that poses a problem for retailers struggling to streamline expenses and promote sustainability.

The supply chain is designed to go in one direction.

Lauren Bittlesbacher

Associate Professor, Babson College

“The supply chain is designed to go one way,” said Lauren Bittlesbacher, associate professor and chair of marketing at Babson College.

“Whenever retailers lose more money from revenue, they have to make up for it by raising prices,” said Bitelsbacher.

“Changing the return policy is an easier drug for the customer to swallow than increasing the purchase price.”

How to avoid return fees

However, shoppers love free returns as much as free shipping. In fact, 98% of consumers say free shipping is the most important consideration when shopping online, followed by more than three-quarters who say the same about free returns, according to a recent report by PowerReviews. Wealthy shoppers were more likely to prefer the free return policy.

If the return option is important, learn the policies before you buy, experts say. Most of the time, Halka said, it’s not immediately obvious. “You usually have to dig into the nitty-gritty.”

She said: Expect restrictions on what can be returned and when. A 30-day window is now typical.

This time is well spent in terms of making the best possible purchase decision. “You have to find the return policy that works best for you,” Kibum said.

And for those looking to avoid going back altogether, shopping in person may be the way to go, Bitelsbacher suggested. “The majority of returns come from regrets because it’s not what we expected. Shopping in person reduces the gap between expectation and reality,” she said.

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Don’t count on free returns: 60% of retailers offer stricter policies – Digital Tech Blog

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