Axios reports that “the era of free returns is ending … Many retailers are fed up with paying for and processing an endless barrage of return packages, and they’re starting to charge for it … More than 40% of retailers are now charging return fees, per research by Narvar, which makes software for retailers.”
The story notes that “returns surged during the height of the pandemic, when more people were shopping online. The return rate increased from 10.6% in 2020 to 16.5% in 2022, costing retailers more than $800 billion, according to the National Retail Federation.”
Expectations among some experts are that “tiered returns” are likely to become common, with retailers allowing “free returns if you sign up for a loyalty program but charge less frequent customers who send items back.”
KC’s View:
The notion of tiered returns makes a lot of sense – retailers should treat their frequent, loyal and most profitable customers differently from casual shoppers. As someone once said within the context of the supermarket industry, “One should always treat cherry buyers better than cherry pickers.”
I do think this is a little tricky – if customers have grown to depend on/expect free returns, taking that away runs the risk of offending them. So retailers always have to be careful about how they craft new policies and then communicate them to customers.
The thing is, I totally understand why retailers need to get this under control. We bought a number of Christmas presents on Amazon over the weekend, not sure if they were right but wanting to take advantage of great pricing and knowing that they’d be easy to return (there is a Whole Foods stores that takes Amazon returns less than a half-mile away).
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