Holiday shoppers will find new restrictions for returns
Retailers strict on returns for holiday season
Shoppers have been busy this holiday season with an expectation total spending could total around $980 billion. Unfortunately, a sizable amount of the money could be lost to returns and FOX 26's Business Reporter Tom Zizka says retailers are trying to limit the loss.
HOUSTON - Shoppers have been busy so far this holiday season with an expectation that total spending could top $980 billion. Unfortunately, for retailers, a sizable amount of that money could be lost to 'returns' and sellers are trying to limit the loss.
Generally, businesses are not required to take returns, but they do because they don't want to alienate consumers. This season, don't be surprised to see return policies that are more strict and costly than in the past.
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The National Retail Federation says, as a percentage of sales, the total return rate last year was 14.5%. That means for every $1 billion in total sales, the retail industry ate $145 million in returns. All told, that number reached $743 billion worth of returns last year.
As a result, particularly for online sales, the NRF finds about 40% of retailers will charge $5 to $10 to ship something back to them. Amazon will impose a return fee if you don't use one of their properties, like a Whole Foods that may be closer.
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Between the combination of legitimate returns, return-fraud, and costs that are still high, retail experts like Rich Hollander say none of this is a surprise.
"That's simply because the customers have figured out the system, or they're buying things they may or may not want to use, or they're buying several sizes to find the right size for them, when it's on the internet," said Hollander.
In a statement leading into Thanksgiving, the NRF says, "Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while at the same time optimizing the shopping experience for their customers."
As businesses want to balance customer convenience and losses, these restrictions are an experiment. They'll know, after the holidays, whether they worked or they've got to find something else to limit their losses.