Free Internet Returns Are Costly

Zara’s return policy is pretty strict. The garment has to be in the same condition it was in when purchased. In the U.K., the company has even begun to charge $1.95 to return purchases by mail. As a matter of fact, 37 countries now have a return charge.

There are no return charges in the United States at this time. However, it could happen. Zara’s return policy in the U.S. is already pretty strict, (items must be accompanied by a receipt, returned within 30 days, and be in pristine condition), but I think current world-wide economic conditions may make it imperative for Zara and some other companies to consider charging for return of merchandise.

Customers have abused the return system, especially of late. Many shoppers purchase a few different items or order two or three sizes to insure proper fit. Then, rejected selections and wrong sizes of the ordered garments are returned for credit. Since Zara cuts garments to fit a size consistently, it is really an excessive practice that is costly to the company when customers continually make such returns.

Of course, during the pandemic caused by COVID-19 when stores were closed and customers were reluctant to shop in person as they slowly reopened, customer’s needs were fulfilled by shopping on-line. At the time, just under 40 percent of retailers charged for returned merchandise. Now, rising costs have made some retailers reconsider this policy as they look at every penny that could be recovered since it affects the store’s profitability.

I had always maintained that the now defunct, semi-annual catalogues that Sears and JCPenney sent out had to be written in a clear language with specific merchandise information to help customers make their choice and order with confidence. Back then, no one (customer or retailer) wanted to deal with the hassles (or costs) of handling returns.

Let’s now look at more recent shopping activity. From the retailer’s viewpoint, convenient, often free, return policies have created issues. On-line shopping has added many store expenses. The merchandise must be selected, carefully packaged, delivered, and finally received by a customer. In this selling process, the salesperson’s comments (such positive reinforcement as, ‘Oh, it is beautiful on you) is missing, and the customer can have doubts about her purchase. The absence of such reinforcement during the purchase process often encourages customers to buy items with the intention to return some of them after reviewing them at home. And, as the price of a Zara garment (or any other brand) has skyrocketed and makes each purchase a special transaction, customers naturally take advantage of the process.

That is creating a real, measurable cost for retailers. But can stores stop free returns here in the U.S.? UPS claims it is handling 60 million returns this year (after Christmas), which is 10 percent higher than last year. It is no surprise since more customers are now trained to use the internet for purchases.

As mentioned above, return charges are seen in other countries. In the U.K., Uniqlo and Next also charge for returns. Uniqlo has been sending a return shipping label which costs $7 since March 1, 2021. On the other hand, Shein allows a sngle free return for the first time and then charges $7 for subsequent returns.

POSTSCRIPT: Some customers continue to expect free returns, but savvy retailers now have discovered that internet costs have become so exorbitant that they must rethink their business model. It may well mean stores will have to charge for returns. Operating costs have risen dramatically and will continue to put pressure on management to raise prices and consider such charges as return fees as well. No one likes the idea of increasing customer costs, and it will have to be done with charm. But I think it is likely that many other retailers will join in the effort.