Retailers Fed Up With Returned Christmas Gifts, Making It Harder And Costlier

Videos by OutKick

Americans will return an estimated $171 billion in merchandise this season.

But returning unwanted or unfitting Christmas gifts won’t be as simple as years past. The logistics company goTRG reports that 60% of retailers have changed their return policies to complicate the process for buyers.

Notable retailers have shortened the time frame in which one can return a product. Customers will have two weeks less to return a gift to Amazon this year, reports NBC News.

Retailers have also implemented re-stocking fees, a charge to return a gift. In essence, you will not receive 100% of the product’s value.

Yet, such fees remain cheaper than the increased shipping costs to return a purchase.

“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.”

Elsewhere, sellers are using policy changes to entice buyers to join loyalty programs. Select retailers offer an extended return window and money-back-guaranteed to their store members.

Becoming a member during checkout has never behooved a customer more.

Why are retailers changing returns policies?

The return process has become increasingly costly for retailers amid rising fuel and labor costs.

“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,” commented USA Today.

In addition to the near $15 hit, retailers often have to then sell returned items at a hefty discount, perhaps by 30% or 40%.

“If it’s out of season, a retailer may not be able to resell it at all,” USA Today adds.

Online shopping continues to increase the number of products returned, thus profits lost. Online buyers have grown accustomed to “bracket buying,” the practice of ordering varying sizes of the same outfit and returning what doesn’t fit.

Blame the women who order Medium and Small (in case of a last-minute diet) gowns for our shortened return windows.

Nearly $800 billion

While returns rise during the Christmas season, retailers must combat the costly practice year-round.

Last year, Americans returned over $761 billion in merchandise. That’s nearly 17% of all retail sales — 17% of products from which the stores likely lost profits.

“If a retailer has been offering free shipping and returns, that’s a lot of cost in that good that the retailer is eating,” added Thomas Borders, general manager of the product lifecycle cloud at Inmar Intelligence.

Ultimately, retailers want the present your aunt bought you even less than you want to keep the cringe-looking attire.

Written by Bobby Burack

Bobby Burack covers media, politics, and sports at OutKick.

Leave a Reply