More Online Retailers Now Charge Return Fees
Last updated December 1, 2022
Better check the return policy before buying online. A growing number of retailers are charging shipping fees that they deduct from the amount they refund.
If you receive an item that is defective or damaged, you shouldn’t have to pay anything to return it in exchange for a replacement. But many retailers are now charging fees when customers send back stuff that didn’t fit or they didn’t like.
Major retailers now charging these fees include Abercrombie & Fitch ($7), Anthropologie ($5.95), BooHoo ($6), JCPenney ($8), J. Crew ($7.50), and Zara ($3.95).
Even L.L. Bean, famous for its one-year, return-for-any-reason policy, now charges $6.50 for returns and exchanges made via UPS or U.S. Mail. (It waives the fee if a purchase was made using an L.L. Bean Mastercard or paid entirely with Bean Bucks, its loyalty points program).
“This is a big change for some well-known retailers who sell a lot of clothing,” said consumer advocate Edgar Dworsky, publisher of ConsumerWorld.org. “So, it’s important to look at the merchant’s return policy before you buy and before you send anything back.”
Why are retailers hitting their customers with these fees?
Before online shopping exploded during the global pandemic, many e-tailers offered free returns to make people feel comfortable about shopping from home. And it worked. But retailers now find that free shipping and free returns can encourage shoppers to over-order—for example, buying the same sweater in several colors and sizes—and returning the ones that don’t fit or want. It’s called “bracketing,” and nearly two-thirds of online shoppers (63 percent) admit to doing it, according to a survey by Narvar, a logistics software company.
“In a sense, online retailers created this monster, so anything they could do to dissuade that [bracketing] behavior and reduce returns is going to save them money,” said Jeffrey Shulman, a professor of marketing at the University of Washington’s Foster School of Business. “Charging for the returns is not only a new source of revenue to defray the cost of handling returns; it's also a way to keep the prices down for people who know what they want and won't be returning.”
When the National Retail Federation (NRF) surveyed its members in the fall of 2021, 40 percent said they charged for mailed/shipper returns. That’s a jump of nine percent from the year before.
The NRF report, released in January, showed the impact of processing returned merchandise: Online sales hit $1.050 trillion in 2021, and much of that merchandise, $218 billion worth or 20.8 percent, was returned. And that figure doesn’t include other expenses, such as the increased labor costs for inspection and re-stocking, taking markdowns on returned items or having to dispose of the ones that can’t be resold.
“If you need to return a holiday gift that was purchased online, and there’s a return fee, see if the retailer has a store in your area. Bringing it back to the store is still free,” Dworsky said. “And if you return it after Christmas, you may be able to cash in on the great sales.”
Check to see if the retailer you’re returning to offers an easy return option. Many retailers now work with return hubs such as Happy Returns, which is a subsidiary of PayPal. Everlane, for example, charges a $7 fee for a return shipping label, but doesn’t charge a fee if the item is dropped off at a Happy Returns location. A nice feature of many return hubs is you don’t need to rebox the item; you simply hand it over. Some retailers also offer free return shipping for customers who drop off re-boxed stuff at FedEx or UPS stores.
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for NW Newsradio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.