New returns restrictions apply for holiday shoppers

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HOUSTON – Shoppers have been busy so far this holiday season, with total spending expected to exceed $980 billion. Unfortunately for retailers, a significant portion of this money could be lost to “returns,” and sellers are trying to limit the loss.

Generally, companies are not required to accept returns, but they do so because they don’t want to upset consumers. This season, don’t be surprised if return policies are stricter and more costly than in the past.

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According to the National Retail Federation, last year’s overall return rate as a percentage of sales was 14.5%. This means that for every $1 billion in total sales, the retail industry generated $145 million in revenue. All told, that number reached $743 billion in returns last year.

For online sales in particular, the NRF notes that about 40% of retailers charge $5 to $10 for returns. Amazon charges a return fee if you don’t use one of its offers, e.g. E.g. a Whole Foods product that may be closer.

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Given the combination of legitimate returns, return fraud and still-high costs, none of this is a surprise, say retail experts like Rich Hollander.

“It’s simply because customers have figured out the system, or they’re buying things that they may or may not want to use, or they’re buying multiple sizes to find the right size for them online,” he told Hollander.

In a statement ahead of Thanksgiving, the NRF said, “Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while optimizing the shopping experience for their customers.”

As companies seek to balance convenience and loss for their customers, these restrictions are an experiment. They will know after the holidays if they worked or if they need to find something else to cut their losses.