Retailers Are Cracking Down on Returns This Holiday Season

The holiday shopping season is chaotic enough without worrying about purchase returns.

In 2022, however, the traditional retail return exchange won’t be as easy as it’s been in recent years.

That’s due to the rising number of actual retail purchase returns, the staggering amount of money involved in consumer buying returns, and the current state of the economy, where high inflation, high costs, and a retracting economy have companies taking a more aggressive stance on green-lighting shopper returns.

The basic issue is the U.S. purchase return rate, which stood at 16.6% in 2021, according to the National Retail Federation, compared to 10.6% in 2020. That represents a total cash amount of $761 billion U.S. dollars in returns, the NRF reported.

Retailers are Getting Tough

With a massive amount of money on the line, U.S. retailers are cracking down on returns in 2022, especially as more consumers opt for digital shopping for the holidays.

“The eCommerce boom, fueled by unprecedented convenience and ‘no questions asked’ returns policies, has created an expensive problem for retailers,” said Pollen Returns founder Spencer Kieboom. “Consequently, returns cost retailers about $218 billion annually as 20% of their inventory is now tied up in the returns process. Retailers are now re-evaluating their approach to returns from policies to resale strategies.”

Consider this list of retailers that are changing their returns policies, from Pollen Returns, an inventory management service provider.

- Kohl’s  (KSS) - Get Free Report no longer pays for return shipping costs.
- Bath and Body Works has limited its previously wide-open return policy to 90 days and to $250 per customer over that period.
- LL Bean, Dillard’s, J. Crew, REI, and Zara now deduct a fee for returns made by mail.
- H&M recently announced it is testing a return fee for online orders in some markets.

The issue is especially acute during the holiday season when profit margins are squeezed due to discounts and as the economy loses steam, which keeps more shoppers on the sideline.

“In recent months, retailers have been updating their return policies in an effort to curb the costs and hassles of returns – a trend we can expect to continue through the holiday season,” said MerchantMaverick.com retail analyst Eric Seppala. “In many cases, return policies are now shorter, while retailers that previously accepted returns without receipts are now requiring proof of purchase for any return.”

It’s not only in-store returns that are affected. Retailers that previously footed the bill for returns sent by mail are changing the return rules.

“Stores like J.Crew and Abercrombie & Fitch are now charging fees to customers that are mailing in their unwanted items,” said Seppala. “Other companies are changing their policies to allow only VIP customers (generally, customers who are in the highest tier of the store’s loyalty program) to return items with no added fee.”

“While these charges are typically less than $10, the costs can really pile up for consumers,” he added.

Tips on Avoiding Return Hassles

Curbing holiday return problems is all about focusing on the issues that tend to get purchases returned – free of any fees and headaches.

Take these tips to the return experience and walk away fee-free and empty-handed, package-wise.

Knowledge of retailers is key. “To avoid the hassle of returns this holiday season, make sure you fully understand each retailer’s return policy before waiting in long post-holiday lines,” Seppala said. “This includes reading the fine print that we often overlook.”

Keep your retail paperwork. Be sure to hold on to your receipts. always get a gift receipt and include it with your purchased gifts to alleviate the stress for loved ones.

“If possible, keep all tags on items, as well as the original packaging,” Seppala noted.

Get physical. For retailers that charge for returns sent by mail, consider taking your return to a brick-and-mortar store if possible.

“In-store returns are rarely charged a fee, although you should check the policy of the retailer,” Seppala added.

Stay calm and carry on. While the return process can be challenging this holiday season, try to keep your cool at the return counter.

“Retail workers – even managers – are expected to abide by the policies of their employers,” Seppala said. “Keep your stress in check and don’t lash out at these workers.”

Instead, find out if there are alternative ways to return your merchandise (such as getting store credit instead of a refund). Or, get creative – resell the item on an online marketplace, donate it to a local charity (and potentially get a tax write-off), or re-gift the item to someone else,” Seppala added.

Shifting Loyalties

Now the return dynamic between shopper and retailer has changed – and not in the customer’s favor. But consumers should understand retailers have their reasons.

“Remember, return charges aren’t there to cover the retailer’s costs as much as they are in place to deter the consumer from returning items in the first place,” Kieboom said.