An increasing number of retailers are eliminating the once-common free online return as they seek to recoup losses from mounting logistical costs.
According to an April survey by shipping and mailing company Pitney Bowes, online returns cost retailers an average 21% of order value, with several brands reporting ratios considerably higher. The financial burden is compounded by the fact that e-commerce return rates are at historic highs — an average of 20.8% in 2021 versus 18.1% in 2020, according to the National Retail Federation (NRF).
According to yearly numbers released by the NRF, online sales accounted for $1.05 trillion of total U.S. retail sales last year. Approximately $218 billion of online purchases were returned, with $23.2 billion deemed fraudulent.
NRF’s January survey also found that for every $1 billion in sales, the average retailer incurs $166 million in returns. It also found that for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud.
To combat this rising cost, many retailers are quietly retiring their free online return policy. Now, retailers are opting to deduct fees from customer refunds if they choose to ship their returns back to the warehouse, while others are not covering shipping costs at all.
Here, see a roundup of all the retailers charging for returns.
Abercrombie & Fitch
The Ohio-based retailer deducts a $7 fee for online returns sent by mail. Customers can return unwanted items they ordered online at a store for free.
American Eagle Outfitters
If an order does not qualify for free returns, customers can still get a label to mail items back. A $5 fee will be deducted from the refund to cover shipping costs.
This Charlotte, N.C.-based department store chain does not cover customer’s return shipping costs. The retailer notes on its site that it will reimburse return shipping costs via a Belk gift card only if items were damaged in the initial shipment; the incorrect item was shipped; or if a defective item was shipped.
For U.S. consumers, the U.K. retailer is charging $6 to return online purchases in a 28-day window.
The department store will deduct a $9.95 fee from a refund to make returns of online purchases by mail.
DSW – Designer Shoe Warehouse
Since 2018, DSW Gold or Elite members receive free return shipping. For all other customers, the costs of return shipping is $8.50 for any number of items and will be deducted from the refund. Customers can return unwanted items they ordered online at a store for free.
The sneaker retailer deducts a $6.99 fee from refunds on all returns made by mail. The deduction will be waived if customers are seeking an exchange by mail.
The department store will deduct an $8 fee from all refunds on returned online purchases made by mail.
Customers wishing to return online orders by mail while using J. Crew’s prepaid label, will see a $7.50 deduction from their total refund. Returns can be made for free in-store.
For all returns by mail, $7.95 will be deducted from the refund amount for using the retailer’s provided return label.
Refunds on online returns are provided in the form of Kith.com gift cards, which exclude original shipping costs and include a $8 restocking fee.
Kohl’s states on its website that it no longer pays for return shipping costs. Costs of shipping back returns are on the customer.
Similar to J. Crew, Lands’ End deducts $6.95 from the refund credit to ship online returns back to the warehouse. On its website, however, the Wisconsin-based brand, does state that U.S. and Canada customers “may qualify” for free returns of non-personalized Lands’ End branded merchandise within 90 days of purchase. It was unclear what the qualifications were to receive the free return.
On its website, the outdoor brand states that returns and exchanges through U.S. mail are $6.50 per package. Customers can return or exchange for free if they used an L.L. Bean Mastercard or paid entirely using Bean Bucks rewards.
Eligible merchandise may be returned free if received within 15 days of the delivery date. However, a return fee of $9.95 will apply for all clearance items, all items returned after 15 days of delivery, and items marked as “Return Fees Apply.”
The U.K.-based company will deduct $7 from customer’s refunds to return online purchases.
According to the retailer’s website, customers will not pay shipping fees up front, but a deduction of $7 will be taken out of the refund.
The outdoor retailer deducts $5.99 from refunds to cover return shipping for standard size/weight packages.
Saks Fifth Avenue
Returns must be initiated within 14 days of the ship date to receive a free return. If returns are initiated after this timeframe, Saks will deduct a $9.95 return charge from the refund.
The retailer will deduct a $6 fee from all refunds on online returns sent by mail.
The Japanese fast fashion retailer does not cover shipping costs to return online purchases, which are not accepted in-stores. Any alteration fees incurred on the returned items are also not refunded. The return cost will be covered, however, if customers received a defective, damaged or incorrect item.
Urban Outfitters deducts a $5 restocking fee from all online orders returned by mail. Customers can return items for free in-store.
Zara caused a stir online in May when it announced it would charge customers in the U.K. 1.95 pounds, or about $2.45, to return online purchases to third-party drop-off points. In the US, however, the Spanish fast fashion retailer is charging consumer $3.95 for the same service.