Why is online returns such a hassle right now?

A few months ago A men’s suit appeared on my doorstep. What I actually ordered was a pink dress. I emailed the retailer. And so began a weeks-long back-and-forth involving jacket photos, badge photos, and check-ins with customer service representatives. It’s the first time in my life shopping online. I faced a truly inconvenient return process. The company seemed to go out of their way to make sure I wasn’t trying to defraud them.

After years of enjoying the easy and free returns that are a normal part of online shopping, I was pleasantly surprised by this experience. But maybe I shouldn’t be: Retailers have been dealing with the high cost of huge returns since the start of the pandemic. Plus the increasing problem of Return fraudWe have introduced more stringent return policies and procedures. This has sometimes been Byzantine in recent years. You can return that shirt. An e-commerce website may notify you. But only within a 14 day window or for store credit only. Yes, you can take that toaster back. But you will need to send it to a local store. This is a practice known in the industry as BORIS, or “buy online, return in store.”

Return fraud—when people claim they never received a package that actually arrived. or sending back a shoebox full of rocks—it’s starting to Busy with retailer operations– Fraudsters have ruined the fun of compliant customers to some extent. When companies Put in place policies to deter the worst offenders. “The average consumer is getting caught, too,” Forrester retail analyst Sucharita Kodali told me. (I saw myself walking around in a jacket.) Still, fraud didn’t get us here. by itself Yields have skyrocketed during the pandemic. As people shop online in abundance and continues to grow: Total returns are expected to reach nearly $900 billion in 2024, compared to $309 billion in 2019. The average rate of return is about 8 percent in in 2019, then nearly 11 percent in 2020. By 2021, the rate was above 16 percent. That’s what the expected returns will be this year, too. Survey From the National Retail Federation and Happy Returns, a UPS company.

Free returns are the second most popular reason people shop with a retailer. According to a Forrester survey in 2024 (free shipping is the top reason), merchants are also making an effort to make their returns worthwhile. In addition to a more complicated return policy, Some stores like REI, JCPenney, and DSW carry them as well. place Accountability to online shoppers with returns or shipping costs (Last year there was a logistics company It is estimated that 40 percent of retailers increasing those fees). Restrictive return policies have the potential to deter shoppers. Although it is still too early to say for sure whether the new rules have a cumulative impact on shopping behavior. Retailers need to balance the risk of annoying customers with the cost of large returns, Kodali said. Returning a single $100 item can cost a store as much as $30, according to some estimates. One time So this might be a trade-off with brands. who are willing to trade And even though people signal in Survey That they notice and care about free returns for shoppers might be good. I was impressed but continued to spend.–

Customers have a reputation for always being right—and have been from generation to generation. Going back to the early days of shopping in large stores American retailers offer generous return policies in hopes of making shoppers happy. People are becoming accustomed to the idea that they can buy in bulk and return some. (and in many cases (Even damaged or used items can be returned for cash.) The rise of Amazon and Zappos has encouraged stores to rush shoppers to spend by absorbing the cost of returns. But in today’s world of online retail Now more and more consumers are sending back items they purchase online. This results in billions of dollars in lost revenue for merchants. That logic has been tested.

The reality of returns is expensive and also ugly: in many cases, those sandals or skirts you don’t want won’t find their way to the next stylish customer. They tend to go to waste—many retailers consider the cost of sorting and repackaging products too high to be worth it, as Amanda Mull explains in atlantic ocean In 2021, although some off-season or late-stream returns make their way to the TJMaxxes and Marshalls of the world for a second life, every year billions of pounds of returns are thrown away in the United States. Dealing with returns is expensive and very annoying. About 60 percent of retailers are issuing refunds and telling customers to keep cheap items rather than sending them back.

Many shoppers are upset that the right to free returns has been removed. But the old methods are not sustainable in any sense. The cap on returns reflects the end of the Millennial lifestyle subsidy in early 2020, when services like Uber no longer received venture capital subsidies. And consumers have to pay full price for things they used to get discounted on. Attracting buyers with price privileges and excessive convenience can only last so long. Finally the truth came in.

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