As holiday shoppers initiate the return process for items acquired during Black Friday and Cyber Monday online shopping sprees, an increasing number of U.S. retailers may advise customers to retain items whose return shipping costs surpass their intrinsic value, according to a Reuters report.
This year, 59 per cent of retailers are implementing so-called “returnless” or “keep it” policies for unwanted products with return costs exceeding their worth, according to a survey conducted by returns services firm goTRG.
The survey involved 500 executives from 21 major retailers, including industry giants Walmart and Amazon.com. Last year, only 26 per cent of companies had such policies, indicating a significant shift, as mentioned by goTRG CEO Sender Shamiss.
As retailers adopt technology to curb excessive costs, more are opting for returnless policies for specific online purchases. Shamiss declined to disclose the names of companies employing these policies, citing concerns that publicising such information may lead to abuse by shoppers, the report said.
These survey results, not previously reported, coincide with U.S. shoppers expected to return USD 173 billion worth of holiday purchases this year, marking a 28 per cent increase from the previous year, according to Optoro, a firm specialising in return management. This surge in returns typically follows pre-Christmas sales events like Black Friday and Cyber Monday and extends beyond Christmas.
Optoro CEO Amena Ali likened the post-holiday return season to a “returns Super Bowl” starting after Black Friday and lasting into February.
Return costs, averaging around USD 30, significantly impact retailers’ profits, necessitating transportation, sorting, and often reselling at a discount or disposing of items at a loss.
Approximately 90 per cent of retailers have revised their policies this year, including offering store credit, implementing return charges, and encouraging customers to return online purchases to physical stores.
Seventeen shoppers interviewed by Reuters shared experiences where companies, including Amazon.com, Chewy.com, eBay, Temu, Keurig, Wayfair, and t-shirt seller True Classic, advised them not to return goods valued between USD 20 and USD 300, even in cases of defects or shipping errors.
Amazon clarified that allowing customers to keep items on a limited number of returns serves as a convenience and aids in maintaining low prices. Wayfair mentioned that certain customers might have the option to retain items at a discount.
Acknowledging the surge in returns, sellers in categories like underwear, bedding, and food were among the first to adopt “keep it” returns, driven by hygiene and health safety considerations. The practice gained traction during the early pandemic ecommerce boom when shipping costs surged, and warehouses faced capacity constraints.
Retailers are now evaluating return costs against the customer’s value, with more significant spenders being more likely to benefit from returnless policies.
In combating potential fraud, retailers like Amazon and Shapermint deploy technology to extend returnless services to trusted customers.
However, some sellers’ anti-fraud measures, like requesting photographic evidence, have led to dissatisfaction among shoppers, highlighting the challenges and complexities of managing returns efficiently.
