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Business

81% of retailers charge a fee to return items

Business

The days of shoppers returning unwanted or ill-fitting items for free are all but gone as the Christmas gifting season gives way to the gift return season.

More than four in five retailers now charge their customers a fee to resend or return an item they don’t want, according to a report from logistics company Happy Returns.

Amazon has started charging customers $1 to return items to a UPS store instead of using a Whole Foods, Amazon Fresh or Kohl’s grocery store — because it owns or has partnership agreements with those companies.

Zara, Macy’s, Abercrombie & Fitch, J. Crew, H&M and others have also added shipping fees for postal returns, according to CNN.

Abercrombie charges its customers a $7 fee to return items, while American Eagle Outfitters deducts a $5 fee on mailed returns that do not qualify for free returns.

Dillard’s charges $9.95 to return items by mail, while H&M requires customers to shell out a $5.99 return fee.

The days when retailers let customers return items for free are over, experts say. Getty Images/iStockphoto

JC Penney’s fee on postal returns is $8 while J.Crew charges $7.50.

This change was primarily driven by the increasing cost of initially selling the item as well as the expense of processing the return.

Last year, customers returned nearly 17% of total merchandise purchased, a total of about $816 billion, according to the National Retail Federation.

Zara, Macy’s, Abercrombie & Fitch, J. Crew, H&M and others have added shipping fees for postal returns. Getty Images/iStockphoto

The 17% figure was more than double the 8% in 2019.

The returns processing process weighs on retailers’ bottom lines. According to retail services company Inmar Intelligence, retailers spend $27 to handle the return of a $100 item purchased online.

Analysts estimate that companies lose about 50% of their margin on returns when you take into account the cost of selling the item as well as processing the return, according to the Wall Street Journal.

According to retail services company Inmar Intelligence, retailers spend $27 to handle the return of a $100 item purchased online. Getty Images/iStockphoto

In the past, retailers were willing to absorb the cost, believing that generous return policies would keep customers coming back.

But the scale of the problem has grown to the point that merchants are now forced to charge fees.

“We’re heading into a trillion-dollar problem here,” Tom Enright, a retail analyst at research firm Gartner, told the Journal.




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