AMAZON, Walmart, and Target have a secret return policy that might surprise you.
Around the holidays, returns skyrocket— globally, $816 billion of retail merchandise was returned in 2022, according to a National Retail Federation report.
"For every $1 billion in sales, the average retailer incurs $165 million in merchandise returns," the NRF reported.
About $212 billion of the $816 billion in returns will be customers sending back digital orders.
59% of surveyed retailers are offering a new policy for returns that aren't financially viable to ship back this holiday season, according to the Returns Report: 2023 Holiday Predictions report from returns services firm goTRG.
Sometimes it is cheaper for a digital retailer to tell a customer to not bother to return an item, but still give them a refund.
Read more on Return Policies
It's called a "keep it" policy and when done correctly it could benefit consumers and retailers.
"Major retailers have unlocked a strategic approach: allowing customers to retain certain items instead of returning them,
"This tactic is especially common for low-cost items," according to the Returns Report: 2023 Holiday Predictions.
"This strategy not only curtails logistical expenses but also bolsters customer loyalty and trust."
Most read in Money
Customers say companies including Amazon, Walmart, Target, Wayfair, Chewy, Kohl's, and Shein use a "keep it" or "returnless" policy, according to data from returns technology provider Narvar.
This new policy has its disadvantages
While the "keep it" policy might save money by having customers keep items, it creates other problems and ignores what has been happening.
"Allowing customers to keep items may be less damaging to the bottom line, but there is still an impact of essentially giving away products for free," Global Data Retail managing director Neil Saunders posted on RetailWire.
"Of course, this can be viewed as the cost of doing business online, but that doesn’t solve the underlying issues," he continued.
Saunders also called the "keep it" policy a "moral hazard."
"It could encourage people to abuse the system or think less when buying products."
Some posters to the RetailWire thread suggested ways to make the "keep it" policy more effective.
"If the problem is costly returns and the abuse of “keep it” policies, then maybe there’s an option to employ selective “keep it” policies targeted at items or price points or specific customers or something that makes more sense than a blanket “keep it” policy," said one commenter.
"Why does it have to be so black and white; embrace the “gray!” they continued.
ncG1vNJzZmivp6x7tbTEZqqupl6YvK57zKilnrFfboV0g5FtZ2ivkaG6or7TZpimmaqku26tzZ1krZminLK1edKemqudpGK%2FpsDUq6VmqJ%2BhtqTFjg%3D%3D