Retail Gets Tough on Returns – Is it the End of “The Customer is Always Right”

In January 2021, I published an article entitled, U.S. Consumers Returned $428 Billion of Merchandise in 2020.” As I wrote then: “I find it astounding (but not surprising) that Americans were that unhappy with what they purchased or were gifted in 2020.”

Apparently, the retail community found it astounding as well. The days of taking things back with no questions asked are over. Why? Because returns have never been higher, and the cost of handling them has increased to $26.50 per $100.

So, what are retailers doing? According to a Wall Street Journal article by Suzanne Kapner, a variety of things.

Amazon gives a heads-up to shoppers about items that have high return rates. Online retailer Dress the Population offers discounts to people who agree not to return their purchases. Retailers with large numbers of physical stores such as Zara and H&M are also making adjustments like charging shoppers for sending returns by mail. 

Retailers clamp down on returns, Suzanne Kapner, the wall street journal

In addition, J.C. Penney charges $8 per return by mail, while other companies are shortening the time a consumer has to make the return. Some are even giving the credit but telling customers to keep the merchandise.

Retailers are also pushing customers to take their returns to the company’s stores rather than mail them to a return center. The reason? A customer is more likely to make another purchase if there in the store.

What I found particularly noteworthy is, according to Suzanne Kapner, 8% of customers account for 70% of returns, which raises the question of why retailers would continue to sell to these people. Retailers know who they are. So, minimally, they could easily block them from shopping.

Retail is a tricky business. Cleaning this problem up will ultimately lead to profitability and better consumer prices.

Now if retailers could only cut down on shoplifting…

One thought

  1. I happen to work for a “big box” warehouse. We ALWAYS accept returns, unless the item isn’t ours or, in the case of consumables, is past it’s due date with respect to when the member bought it.
    There is NOTHING we won’t take back. Same as W@7m@&t and T@86et.
    People come here and purchase many items to use while on vacation, only to return them at the end of their vacation–electric bikes,air mattresses, snorkeling gear, surf boards, boogie boards–you name it. Even towels!
    I have seen 8 year old used recliners, 5 year old computers & printers, 10 year old flat screens, 10 year old mattresses, used power washers, tents, generators, even used tires (which we won’t take back) returned to us.
    The thing is, as these items are non resalable, they must go back to the vendor. As long as we and the other major department stores, have a good relationship with our vendors, they will take the brunt of the costs.
    We employ 10+ people in this department who’s job it is, is to make sure we account for all these items, as well as package and ship them.
    The cost of all of this is built into our CDB.
    Also, membership costs are reflective of this.

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