Is the era of free returns for online purchases coming to an end?
Is the era of free returns for online purchases coming to an end?
The holiday shopping season is upon us. According to the National Retail Federation, holiday retail sales are likely to be 6% to 8% higher than last year. And online sales look like they’ll be up 10 to 12%.
The thing about online shopping, though, is that a lot of what’s bought gets returned, and that costs companies a lot of money. A growing number of them are changing their return policies.
When people buy clothes or shoes online, many tend to order a few different sizes to try on. Then they keep one and return the rest.
For years, it’s been easy — and free — to do that at many online retailers.
“Everybody wanted to have, like, a superliberal return policy just to be competitive with e-commerce companies like Amazon and others,” said Sucharita Kodali, an analyst at Forrester. Now, she added, about 30% of clothes and shoes bought online are returned. “There’s a huge carbon footprint that’s associated with it, and that’s a huge cost” that companies tend to eat.
“Returns are deadly for a retailer because in most cases, the merchandise that’s returned cannot be resold as new,” said Mark Cohen at Columbia Business School. He added that companies lose a lot of money on online returns, and the situation isn’t sustainable.
“So we’re starting to see some creeping restrictions on the manner in which customers can return goods,” he said.
Many retailers have shortened the window for returns. And, according to data company Inmar Intelligence, the percentage of retailers that charge for return shipping has doubled in the last year.
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