A spike in gift returns is always closely observed during the holiday season.
It may prove difficult to get things back this year for free or at a reduced cost.
A recent survey of retail executives found that 60% of retailers are changing their returns policies. Fewer promises free returns.
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According to the National Retail Federation’s latest data, retailers can expect 18% or $158 million of merchandise sold during holiday shopping seasons to be returned.
The return rate for 2021 was 16.6% of U.S. total retail sales or $761 billion in returns. In 2022, fewer businesses will be able afford such a high price tag.
Many retailers are changing their return policies due to rising costs and shrinking margins. Some have reduced the return window or even charged a restocking fee. Spencer Kieboom is the founder and CEO at Spencer Kieboom. Pollen Returns, a return-management company.
Expect shorter return windows, restocking fees
While preparing a vehicle to be delivered at a United States Postal Service processing center in Washington, D.C., a letter carrier holds Amazon.com parcels.
Andrew Harrer | Bloomberg | Getty Images
Gap and Old Navy stores, Banana Republic, J. Crew was once known for their generous return policies that extended the garment’s lifetime. However, they have now reduced their regular return window to a month. J. offers some relief for year-end shoppers. Crew and other companies are offering extended holiday exchanges and returns.
Anthropologie offers REI and L.L. Bean (which also once promised lifetime returns), there’s now a fee — all around $6 — for mailed returns.
Kieboom explained that “these adjustments in return policies don’t exist to cover costs.” “They are there to discourage the consumer from returning.”
Margin shrinking due to rising costs
Blue Yonder’s senior director Erin Halka said that free returns were a popular convenience model during the pandemic. She said that retailers are now paying more for shipping and labor, which makes it difficult to sustain.
She said that charging for returns is one way to pay a portion of the cost. Customers may be discouraged from buying too many goods, as at least 10% cannot be resold.
Kieboom explained that retailers often struggle with excessive inventory. “Often returns don’t end up back on shelves,” which can cause a problem in retailers who are trying to cut costs and improve sustainability.
The supply chain should only go one way.
Lauren Beitelspacher
Associate Professor at Babson College
Lauren Beitelspacher is an associate professor at Babson College and chairs the marketing department.
Beitelspacher stated that the more retailers lose on returns, the more they must make up by raising prices.
“Changing the return policy is easier for customers to swallow than increasing the purchase price.
How to avoid paying return fees
Free shipping is still a favorite of many shoppers. According to PowerReviews’ recent survey, 98% said free shipping was the most important factor when shopping online. Then, more than three-quarters agreed that free returns were equally important. Even more wealthy shoppers preferred a free return policy.
Experts recommend that you get to know the policies and whether the return option is available. Halka explained that sometimes it’s not clear right away. “You usually have to look into the fine print.”
She stated that there will be limitations on the items that can and cannot be returned, as well as when they can be returned. “A 30-day window of opportunity is common.”
This is a good time investment to make the best purchase decision. Kieboom explained, “You must find the best return policy.”
Beitelspacher suggested that shopping in person could be a way to avoid return hassles. “Most returns are due to regret over something that wasn’t what we expected.” She said that shopping in person reduces the expectation-reality gap.
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