’Tis the season for giving – and that means ’tis the season for shopping. Maybe you’ll splurge on a Black Friday or Cyber Monday deal, thinking, “I’ll just return it if they don’t like it.” But before you click “buy,” it’s worth knowing that many retailers have quietly tightened their return policies in recent years.
As a marketing professor, I study how retailers manage the flood of returns that follow big shopping events like these, and what it reveals about the hidden costs of convenience. Returns might seem like a routine part of doing business, but they’re anything but trivial. According to the National Retail Federation, returns cost U.S. retailers almost US$890 billion each year.
Part of that staggering figure comes from returns fraud, which includes everything from consumers buying and wearing items once before returning them – a practice known as “wardrobing” – to more deceptive acts such as falsely claiming an item never arrived.
Returns also drain resources because they require reverse logistics: shipping, inspecting, restocking and often repackaging items. Many returned products can’t be resold at full price or must be liquidated, leading to lost revenue. Processing returns also adds labor and operational expenses that erode profit margins.
Read more on The Conversation.
