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Why some of the largest retailers are now charging return fees and how to avoid them 👕
Back when Covid-19 was at its peak, retailers closed their stores without having any knowledge of when they’d be reopening.
They needed to make online shopping as easily accessible as possible so they could continue to make money. Some decided to extend their return policies as a result.
And that’s when we saw a large increase in e-commerce sales.
In fact, Morgan Stanley says e-commerce now accounts for 22% of sales globally which has risen from 15% back in 2019.
Online shopping soared during the pandemic but unfortunately, so did online returns 📮
Retailers are beginning to realize just how much of a financial burden online returns are becoming, and they’re having to make some drastic changes to their return policies.
Convenience plays a huge part in online shopping but when when sizing seems to be different everywhere (sigh), it can be difficult. We often have to order several different sizes and styles of clothing and those that don’t fit or look right, we return.
Stick a pre-paid label on the box and drop at the local UPS store.
But bracketing feeds into a continuous pattern of buying and returning.
And return costs for retailers are continually on the rise due to ✨ supply chain issues and higher transportation costs ✨
Inflation, baby 🙃 📈
We’re seeing more reports on stores feeling overwhelmed, and some say their warehouses are clogging up with returns which are “piled to the ceilings.”
Sounds dramatic, but it’s true.
And in January this year, The National Relief Federation said for every $1B in sales, retailers are incurring $166M in returns.
There’s even rumors of people being allowed to keep their unwanted merchandise as opposed to retailers dealing with the costs 🤯
But it’s not just bracketing that’s costing millions…
It’s also return fraud (eg, wearing clothes on a night out and returning them in an unsalable condition).
And according to a survey, for every $100 in returned merchandise, retailers lose $10.30 to it.
*Does some calculations*
That’s just over 10%.
As retailers are losing more money each year, it’s likely we’ll see a decline in free returns. Many are now charging a shipping fee which is deducted from your refund amount.
And back in December 2021, CNN reported returns made during the holiday season would cost over half the price of the item to process which is up by 59% since 2020 🤯
So it’s looking like extended holiday returns could also become a thing of the past for some stores.
Even PayPal’s free return shipping is coming to an end on November 27th.
To help you make better money decisions this year, here’s a list of retailers who have updated their policies…
Kohl’s changed its “forever policy” as they said people were taking advantage of it. And to be fair, “forever” is a very long time ♾️
They’ve now capped their returns to 180 days from the time of purchase, which means you’ll still get a full six months to make your mind up about that dress you might wanna wear in spring.
🧼 Bath and Body Works return policy
Back in September, Bath and Body Works announced while still honouring their 100% satisfaction guarantee, they would now be limiting customers to $250 in non-receipted returns or exchanges within a 90-day period.
Boohoo now charge a $6 fee to return online purchases within a 28-day window.
J.Crew has halved its return window, so you’ll now have 30 days to make a return instead of 60 days. And if you’re using their return shipping label, the $7.50 fee will be deducted from your refund amount.
But there’s some good news – they’ve announced that any orders placed from October 12th, 2022 through to December 9th, 2022, can get extended returns and exchanges until January 9th next year🎄
👔 Gap, Banana Republic, and Old Navy return policy
These stores previously allowed 45 days for returns but in June this year, it was lowered it to 30 days.
Which kinda sucks.
PSA: 30 days is from the date your item was shipped. Not the date of delivery.
A $3.95 charge will be taken from your refund amount for returns.
Next time you’re shopping online, take a look at the return policy before checking out.
Cast your eagle eyes on the small print to see if there are any fees. You never know, some stores could be silently updating their policies without making a public service announcement 👺
⚠️ As we’re entering the holiday season, Black Friday and Cyber Monday are just around the corner waiting to pounce on their prey. So for those who are prone to impulse buying, check out the top 12 stores with the best return policies.
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Big love. Cleo 💙
And so is your bank balance
As we continue to power through the end of 2020, it’s time to look back on how consumer spending behaviors have significantly changed in light of the global pandemic. With a load of social restrictions put in place, everything from travel plans to socializing at bars and restaurants have been put on hold, impacting the ways consumers are spending their money.
So, what's Cleo got to do with financial health? It seems to be all the rage for Fintech startups to talk about financial health at the moment.