It’s one of the most under-discussed policies of some of the largest US retailers: sometimes they give customers full refunds and also let them keep unwanted items.
Returnless refunds are a tool that more and more retailers are using to keep online shoppers happy and reduce shipping costs, handling time and other rising costs of returned products.
Companies like Amazon, Walmart and Target have decided that some items aren’t worth the cost or hassle of getting them back. Think of a $20 T-shirt that might cost $30 in shipping and handling to repair. There are also single-use items, such as a pack of plastic straws, that may be difficult to resell or medications that may be unsafe to put back on the market.
Analysts say the companies offering returnless refunds do so somewhat sporadically, typically reserving the option for low-cost items or items with limited resale value. But some online shoppers said they could also keep more expensive products.
Dalya Harel, 48, recently received a return-free refund after ordering a desk from Amazon that cost about $300. When the desk arrived, she noticed some key parts were missing and it was impossible to put it together, Harel said. She was unable to request a replacement and get it to her lice detection service office in New York in a reasonable time because the item was out of stock.
Harel, who routinely buys towels and other products from Amazon for her business, said her team contacted the company’s customer service department. She was pleasantly surprised to learn that she would get her money back without having to return the agency.
“That’s one less headache to deal with,” Harel said. “It was very nice for us that we did not have to make an extra trip to the post office.”
She used the desk pieces to create makeshift shelves in her Brooklyn office.
A mysterious process
While the retail practice of allowing customers to keep goods and get their money back isn’t exactly a trade secret, the way it works is shrouded in mystery. Companies are reluctant to disclose the circumstances in which they issue refunds without returns due to concerns about the potential for returns fraud.
Even if brands don’t provide details about such policies on their websites, returnless refunds are on the rise in at least some retail corners.
Amazon, which industry experts say has engaged in the practice for years, announced in August that it would expand the option to third-party sellers who generate the bulk of sales on the e-commerce giant’s platform. Under the program, merchants using the company’s fulfillment services in the US can choose to offer customers a traditional refund for purchases under $75, without the obligation to return what they ordered.
Amazon did not immediately respond to questions about how the program works. But publicly it has offered return-free refunds more directly to international sellers and those offering cheaper goods. Items sold in a new section of Amazon’s website that lets U.S. shoppers buy cheap goods shipped directly from China also are eligible for refunds without returns, according to documents seen by The Associated Press.
In January, Walmart gave a similar option to sellers selling products on its growing online marketplace, leaving it up to sellers to set price limits and determine whether and how they want to participate.
China-founded e-commerce companies Shein and Temu say they are also offering no-return refunds on a small number of orders, as do Target, online shopping site Overstock and pet products e-tailer Chewy, which a customer said encouraged them to send unwanted items. donate items to local animal shelters.
Wayfair, another online retailer cited by some customers as offering refunds without returns, did not respond to a request for comment on its policy.
Deciding who qualifies – and when
In general, retailers and brands are careful about how often they let customers keep items for free. Many of them use algorithms to determine who should get the choice and who shouldn’t.
To make this decision, the algorithms assess multiple factors, including how much to trust a customer based on past purchase and return patterns, shipping costs and the demand for the product in the customer’s hands, said Sender Shamiss, CEO. from goTRG, a reverse logistics company that works with retailers like Walmart.
Optoro, a company that helps streamline returns for Best Buy, Staples and Gap Inc., has seen retailers assess a customer’s lifetime value and extend no-return refunds as a kind of unofficial, discreet loyalty perk, according to CEO Amena Ali.
The king of online retail seemed to verify that the process works that way.
In a statement, Amazon said it is offering free returns on a “very small number” of items as a “convenience for customers.”
The company also said it has received positive feedback from sellers about the new program that allowed them to tell customers they could keep some products and still get reimbursed. Amazon said it was monitoring for signs of fraud and establishing eligibility criteria for sellers and customers. It provided no additional details on what that entailed.
Online shopping and the costs of returns
Some retailers are also tightening the liberal returns policies they have long had to encourage online orders. Shoppers who enjoyed making purchases on their computers or mobile phones became accustomed to filling up their digital shopping carts with the intention of returning items they ultimately didn’t like.
Online shopping also grew significantly during the COVID-19 pandemic, as homebound consumers reduced their trips to stores and relied on sites like Amazon for everyday items. Retail companies have talked in recent years about returns becoming more expensive to process due to growing volume, rising inflation and labor costs.
Last year, U.S. consumers returned $743 billion worth of merchandise, or 14.5% of the products they purchased – up from 10.6% in 2020, according to the National Retail Federation. According to loss prevention company Appriss Retail, returned merchandise was valued at $309 billion in 2019.
Last year, about 14% of returns were fraudulent, costing retailers $101 billion in losses, according to a joint report from the National Retail Federation and Appriss Retail. The problem extends from small-scale fraud – such as shoppers returning previously worn clothing – to more complicated schemes by fraudsters who return shoplifted items or items purchased with stolen credit cards.
To combat excessive returns, some retailers, including H&M, Zara and J. Crew, have started charging customers for returns in the past year. Others have shortened their return period. Some shopping sites, such as Canadian retailer Ssense, have threatened to remove frequent repeat visitors from their platforms if they suspect abuse of their policies.
However, retailers don’t all look at returning customers the same way. Such customers can be considered “good returners” if they buy (and keep) many more items than they return, Ali said.
“Often your most profitable customers tend to be high-yield people,” she says.
It’s one of the most under-discussed policies of some of the largest US retailers: sometimes they give…
PHILADELPHIA (AP) — An attorney for Elon Musk’s political action committee told a Philadelphia judge Monday…
FERGUSON TOWNSHIP – The owner of a struggling water company in rural Center County says he is…