A growing number of retailers are eliminating the once-common free online return as they seek to recoup losses resulting from increased logistics costs.
According to an April survey by shipping and direct mail company Pitney Bowes, online returns cost retailers an average of 21% of order value, with several brands reporting significantly higher ratios. The financial burden is compounded by the fact that e-commerce return rates are at historic highs – an average of 20.8% in 2021 compared to 18.1% in 2020, according to the National Retail Federation (NRF).
According to annual figures released by the NRF, online sales accounted for $1.05 trillion of total US retail sales last year. About $218 billion in online purchases were returned, including $23.2 billion found to be fraudulent.
The NRF’s January survey also found that for every $1 billion in sales, the average retailer incurs $166 million in returns. He also found that for every $100 of returned merchandise accepted, retailers lose $10.30 to return fraud.
To combat this rising cost, many retailers are quietly withdrawing their free online returns policy. Now, retailers choose to deduct costs from customer refunds if they choose to send their returns back to the warehouse, while others don’t cover shipping costs at all.
Here, see an overview of all retailers charging for returns.
Abercrombie & Fitch
The Ohio-based retailer deducts a $7 fee for mailed online returns. Customers can return unwanted items they ordered online to a store free of charge.
This Charlotte, North Carolina-based department store chain does not cover customer return shipping costs. The retailer notes on its site that it will reimburse return shipping costs via a Belk Gift Card only if the items were damaged during the original shipment; the wrong item was shipped; or if a defective item has been shipped.
For US consumers, the UK retailer charges $6 to return online purchases within a 28-day window.
The department store will deduct a $9.95 fee from a refund to make returns of online purchases by mail.
DSW – Designer Shoe Warehouse
For DSW Gold or Elite members, return postage is free. For all other customers, the return shipping charge is $8.50 for any number of items and will be deducted from the refund.
The sneaker retailer deducts a $6.99 fee from refunds on all mail-in returns. The deduction will be reversed if customers request an exchange by mail.
Customers wishing to return online orders by mail while using J. Crew’s prepaid label will see a $7.50 deduction from their total refund. Returns can be made free of charge in store.
Similar to J. Crew, Lands’ End deducts $6.95 from the refund credit to resend online returns to the warehouse. On its website, however, the Wisconsin-based brand states that US and Canadian customers “may be eligible” for free returns of non-personalized Lands’ End branded merchandise within 90 days of purchase. It was unclear what the qualifications were to receive the free return.
On its website, the outdoor brand states that US mail returns and exchanges cost $6.50 per package. Customers can return or exchange for free if they used an LL Bean Mastercard or paid in full with Bean Bucks rewards.
Eligible merchandise may be returned free of charge if received within 15 days of the delivery date. However, a return charge of $9.95 will apply to all clearance items, all items returned after 15 days of delivery, and items marked “Return charges apply.”
The UK-based company will deduct $7 from customer refunds to return online purchases.
Saks Fifth Avenue
Returns must be initiated within 14 days of shipment date to qualify for a free return. If returns are initiated after this time, Saks will deduct a $9.95 return fee from the refund.
The retailer will deduct a $6 fee from all refunds on mailed online returns.
The Japanese fast fashion retailer does not cover shipping costs to return online purchases, which are not accepted in-store. Alteration fees incurred on returned items are also not refunded. Return postage will be covered, however, if customers received a defective, damaged, or incorrect item.
Urban Outfitters deducts a $5 restocking fee from all online orders returned by mail. Customers can return items free of charge in store.
Zara caused a stir online in May when it announced it would charge customers in the UK 1.95 pounds, or about $2.45, to return online purchases to third-party drop-off points. In the United States, however, the Spanish fast fashion retailer charges the consumer $3.95 for the same service.