Black Friday warnings due to retailers changing return policies

‘Tis the season of giving – and that means it’s the season of giving shoppingMaybe you spend money on someone black Friday or cyber monday dealThinking, “If they don’t like it I’ll return it.” But before you click “buy”, it’s worth knowing that a lot retailers quietly tightened its withdrawal policies In recent years.

As a marketing professor, I study how retailers manage the flood of returns after big shopping events like this, and what it reveals about the hidden costs of convenience. Returns may seem like a routine part of doing business, but they are minor. According to the National Retail Federation, returns cost American retailers approximately US$890 billion each year.

Part of that staggering figure comes from return fraud, which includes everything consumer Buying and wearing items once before returning them – a practice known as “wardrobe-wearing” – leads to more fraudulent acts such as falsely claiming that an item never arrived.

Returns also drain resources because they require reverse logistics: shipping, inspection, restocking and often repackaging items. Many returned products cannot be resold at full price or must be destroyed, resulting in lost revenue. There is also labor and operations involved in processing returns. Expenditure Due to which the profit margin gets reduced.

How e-commerce changed returns

While retailers have offered return options for decades, their use has increased dramatically in recent years, reflecting how much shopping habits have changed. before the rise of e-commerceShopping was a sensory experience: consumers touched clothes, tried on clothes, and saw colors in natural light before purchasing. If something doesn’t work, the customer brings it back gatherWhere an associate can quickly inspect it and restock.

Online shopping changed everything. While e-commerce offers convenience and variety, it removes key sensory cues. You can’t feel the material, test the fit, or see the true color. The result is uncertainty, and with uncertainty comes higher rates of return. An analysis by Capital One shows that the return rate on online purchases is nearly three times higher than in-store purchases.

When the COVID-19 pandemic hit, the trend toward online shopping accelerated. Even hesitant online shoppers have had to embrace it. To encourage purchasing, many retailers introduced or expanded generous return policies. The strategy worked to boost sales, but it also created a culture of returns.

According to National Retail Federation data, returns in 2020 accounted for 10.6% of total U.S. retail sales, nearly double from the previous year. By 2021, this increased to 16.6%. Unable to try things on in stores, consumers began ordering multiple sizes or styles, keeping one and sending back the rest. This behavior was logical from a buyer’s perspective but was extremely costly for retailers.

high cost of convenience

Most supply chains are designed to move in one direction: from production to consumption. Reverses that flow. When goods move backwards, it adds layers of cost and complexity.

Returns to stores used to be simple: A customer would take an item back to the store, the retailer would inspect the product, and, if it was in good condition, it would immediately go back on the shelf. However, online returns are far more cumbersome. Products can take several weeks in transit and often cannot be resold – by the time they arrive, they may be out of season, obsolete or no longer in their original packaging.

Logistics costs compound the problem. During the pandemic, consumers became accustomed to free shipping. This means retailers now often pay twice: once to deliver the item and again to retrieve it.

Now, in the post-pandemic world, retailers are trying to strike a balance – maintaining customer goodwill without sacrificing profitability. One solution is to raise prices, but especially today, when inflation is in the headlines, buyers are sensitive to price increases. The second, more common approach is to tighten return policies.

In practice, this takes many forms. Some retailers have begun charging small flat fees for returns, even if a customer sends an item back at their own expense. For example, direct-to-consumer retailer Curvy Senses offers customers unlimited returns and exchanges of any item starting at $2.98. Others have shortened their return windows. For example, summer beauty retailers Sephora And Ulta reduced its return period from 60 days to 30 days.

Many brands now add large, distinctive “do not remove” tags to prevent consumers from wearing items and then sending them back. And increasingly, retailers are offering store credit instead of cash or credit card refunds, ensuring that returned sales at least stay within their company.

Some retailers advertise these changes prominently. Instead, they appear quietly in the fine print of return policies – policies that are now longer, more specific, and much less forgiving than before.

As we head into the busiest shopping season of the year, it might be worth pausing before clicking “shop.” Ask yourself: Is this something I really want – or do I plan to return to it later?

Whenever possible, shop in person and return in person. And if you’re purchasing online, make sure you’re familiar with the return policy.