Returning that Christmas gift you don't like might involve extra steps or costs this year compared to the past.
Returned merchandise adds up. In 2022, 16.5% of merchandise purchased at retailers was returned, according to estimates from the National Retail Federation, a trade group for retailers. All that stuff represented about $816 billion in sales, according to the NRF.
Every returned item costs retailers money. Many cover return shipping for you to send the item back. And even if the item is still in new condition, retailers won't put it back on the shelf. Instead, they'll sell it at a steep discount or write it off entirely.
Some big retailers have started passing some of the costs of returns to consumers over the past year. In April, Amazon started charging customers $1 if they returned an order at a UPS store. Amazon still allows customers to drop off returns for free at other locations, such as Kohl's or its own Whole Foods stores.
Other stores, such as H&M, JCPenney, and J.Crew, charge a fee for returns that are mailed back. The fees, which retailers justify to customers as shipping costs or "restocking fees," are part of at least a dozen major brands' return policies and range from a few dollars to a percentage of the order's value, USA Today reported in November.
But making returns more costly or harder for customers can backfire if retailers go too far. Fifty-nine percent of consumers say they were deterred from making a purchase at one point because of strict return policies, a survey published in August by supply chain software provider BlueYonder found.
That could be one reason why returning items to a physical store remains free in most cases. H&M, JCPenney, and J.Crew won't charge a fee on returns made at their stores, according to the companies' websites.
Some retailers are offering extended return windows for holiday-season purchases. Amazon, for example, says that most purchases made between Nov. 1 and Dec. 31 this year can be returned until Jan. 31, 2024 — potentially tripling its normal return period of 30 days, depending on when you ordered something.
Other stores, especially some big-box chains, continue to offer relatively generous return policies. Costco accepts returns on most items for an indefinite period of time, allowing customers to return items they've used for years, such as mattresses.
Target, meanwhile, allows returns of its own-branded products for up to one year after the date of purchase, including refunds on items from its Cat & Jack kids clothing brand.
