You Should Expect to Pay for Your Upcoming Gift Returns

21 percent of purchases are returned, a report by Pitney Bowes revealed. And, in 2023, it’s becoming harder for consumers to give back these unwanted items: roughly 60 percent of businesses have recently changed their return policies, whether by instituting by a fee for returns or shortening the window wherein they accept them, according to goTRG, a technology company that aims to improve the process.

Retailers Introduce Fees for Returns (Unless You Visit in Person)

But are the fees — sometimes a percentage of the product’s total price — justified? If you bought the item online, you’re essentially shipping it twice: once to you and once back. Estimated at $15 total for each item, brands are losing out big if they offer to cover shipping, especially if it’s a larger item (i.e. a bike).

A flat $7 fee, for example, would cover half of the brand’s share of the exchange, and that’s not including the amount lost on the failed sale. Plus, the process of getting returned products back onto the shelves is… tough, to say the least. Most times it can’t be sold at full price, which is why you see “open box” or “refurbished” sales. Otherwise, these products are offloaded to a liquidator, who sells the products to wholesalers at a discounted rate.

The best bet to avoid a fee is to visit in person, if you can. The fee is typically introduced to cover shipping costs, which have also risen with inflation. But at the physical store, you can sidestep shipping costs and make your case for the item’s condition instead of trusting a faraway receiving center to determine whether the item is eligible for return in the first place.

Below, you’ll find a sampling of brands that now charge a fee for sending an item back:

• Abercrombie & Fitch: $5
• Footlocker: $7
• Kith: $8
• Neiman Marcus: $9.95

The Crisis Continues

And don’t expect this retail crisis to subside any time soon. The holidays are when returns spike — 25-30 percent of merchandise is returned or exchanged during this period — and brands are still working through excess inventory from the pandemic. As such, many will up the ante even more in an attempt to deter returns while they can asses their potential losses. This will upset consumers, but brands are willing to rock the boat to find the right balance, which could mean rising costs still.

“Three out of four consumers say their recent returns experiences have been inconvenient,” Vijay Ramachandran, the Vice President of Market Strategy for Global E-Commerce at Pitney Bowes, says. “At the same time, more than two out of three retailers say they’re actively trying to lower the cost of returns. This means brands have yet to find an effective balance between returns convenience and cost. Dialing up the ‘right’ balance will be different for every brand based on what they’re selling and who they’re selling to.”

Shrinking Return Windows

For apparel brands, the “right” balance is a cocktail of instituting a shorter holiday return window and charging fees if you don’t return the item to an eligible brick-and-mortar. J.Crew, for example, says items bought between 10/19 and 12/9/22 can be returned until 1/9/23. For items bought at Madewell between 11/9 and 12/9/22, the return window also closes on 1/9/23.

By shortening this window, brands better position the items for recirculation, which typically takes 30-45 days, an expert told Insider. That’s far too long for most stores, which try to keep pace with e-commerce. But less returns mean less losses — the total tally was over $700 billion last year, a number retailers hope they can cut in half over the next decade.

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