Retailers increasingly telling customers to skip returns

Retailers have a new message for consumers looking to return an item: Just keep it., Walmart and other companies are using artificial intelligence to decide whether it makes economic sense to process a return. For inexpensive items or large ones that would incur hefty shipping fees, it is often cheaper to refund the purchase price and let customers keep the products, The Wall Street Journal reports. 

The relatively new approach, popularized by Amazon and a few other chains, is being adopted more broadly during the COVID-19 pandemic, as a surge in online shopping forces companies to rethink how they handle returns. 

“We are getting so many inquiries about this that you will see it take off in coming months,” says Amit Sharma, chief executive of Narvar Inc., which processes returns for retailers. 

A Target Corp. spokeswoman says the retailer gives customers refunds and encourages them to donate or keep the item in a small number of cases in which the company deems that option is easier than returning the purchase.

A Walmart spokeswoman says the “keep it” option is designed for merchandise it doesn’t plan to resell and is determined by customers’ purchase history, the value of the products and the cost of processing the returns.   

The number of e-commerce packages that were returned in 2020 jumped 70% from 2019, according to Narvar. More than half of the increase was due to higher e-commerce sales, Narvar estimated, while more than one-quarter was the result of shoppers’ not wanting to return web orders to physical stores. A smaller percentage was because people didn’t get the right size—either because their weight had changed during the pandemic or they were unfamiliar with the brand’s sizing.  

Processing online returns can cost $10 to $20, excluding freight, depending on the item, says Rick Faulk, chief executive of Locus Robotics, which uses robots to help automate returns.

In past years, retailers urged shoppers to return online orders to stores not only to reduce costs but also to boost sales because customers tend to make additional purchases while there, Faulk says. Doing so this year is problematic given capacity constraints on retailers and the reluctance of some consumers to frequent enclosed public spaces. Read the full story.