Many retailers propose ‘returnless refunds.’ Just don’t expect them to talk about it

It’s one of the most under-publicized policies of some of the biggest U.S. retailers: sometimes they provide customers packed refunds and let them keep unwanted items too.

Returnless refunds are a tool that more retailers are using to keep online shoppers joyful and to reduce shipping fees, processing period and other ballooning costs from returned products.

Companies such as Amazon, Walmart and Target have decided some items are not worth the expense or hassle of getting back. ponder a $20 T-shirt that might expense $30 in shipping and handling to recover. There are also single-use items, such as a package of plastic straws, that might be challenging to resell or medicines that could be unsafe to trade again.

Analysts declare the companies offering returnless refunds do it somewhat sporadically, typically reserving the alternative for low-expense objects or ones with limited resale worth. But some online shoppers said they’ve also been allowed to keep more pricey products.

Dalya Harel, 48, received a profitability-free refund recently after ordering a desk from Amazon that expense roughly $300. When the desk arrived, she noticed it was missing some key pieces and would be unfeasible to put together, Harel said. She couldn’t request a replacement and have it within a reasonable period for the office of her recent York lice detection removal service because the item was out of ownership.

Harel, who routinely buys towels and other products from Amazon for her business, said her throng reached out to the corporation’s customer service line. She was pleasantly surprised to listen she would get a refund without having to send back the desk.

“That’s one less headache to deal with,” Harel said. “It was really enjoyable for us to not have to make an extra trip up to the post office.”

She used the desk pieces to make makeshift shelves in her office in Brooklyn.

While the retail habit of letting customers keep merchandise and get their money back is not exactly a trade secret, the way it works is shrouded in mystery. Companies are not keen to publicize the circumstances in which they issue returnless refunds due to concerns over the potential for profitability fraud.

Even if brands don’t provide details about such policies on their websites, returnless refunds are expanding in at least some retail corners.

Amazon, which industry experts declare has engaged in the habit for years, announced in August that it would extend the alternative to the third-event sellers who drive most of the sales on the e-commerce giant’s platform. Under the program, sellers who use the corporation’s fulfillment services in the U.S. could choose to propose customers a traditional refund for purchases under $75 along with no obligation to profitability what they ordered.

Amazon did not immediately respond to questions about how the program works. But publicly, it has pitched returnless refunds more directly to international sellers and those who propose cheaper goods. Items sold in an upcoming section of Amazon’s website, which will allow U.S. shoppers to buy low-expense goods shipped directly from China, will also be eligible for returnless refunds, according to documents seen by The Associated Press.

In January, Walmart gave a similar alternative to merchants who sell products on its growing online marketplace, leaving it up to sellers to set worth limits and determine if or how they desire to participate.

China-founded e-commerce companies Shein and Temu declare they also propose returnless refunds on a tiny number of orders, as does Target, the online shopping site Overstock and pet products e-tailer Chewy, which some customer said had encouraged them to donate unwanted items to local animal shelters.

Wayfair, another online retailer cited by some customers as offering returnless refunds, did not reply to a request for comment on its policies.

Overall, retailers and brands tend to be careful about how often they let customers keep items for free. Many of them are deploying algorithms to determine who should be given the alternative and who should not.

To make the selection, the algorithms assess multiple factors, including the extent to which a shopper should be trusted based on prior purchasing – and returning – patterns, shipping costs and the demand for the product in the customer’s hands, according to Sender Shamiss, CEO of goTRG, a reverse logistics corporation that works with retailers like Walmart.

Optoro, a corporation that helps streamline returns for Best Buy, Staples and Gap Inc., has observed retailers assessing the lifetime worth of a customer and extending returnless refunds as a type of unofficial, discreet loyalty advantage, according to CEO Amena Ali.

The king of online retail appeared to verify the procedure works that way.

In a statement, Amazon said it offers returnless refunds on a “very tiny number” of items as a “convenience to customers.”

The corporation also said it’s hearing positive feedback from sellers about its recent program that authorized them to inform customers they could keep some products and still be reimbursed. Amazon said it was monitoring for signs of fraud and setting eligibility criteria for sellers and customers. It didn’t provide additional details on what that encompassed.

Some retailers also are stiffening the liberal profitability policies they long employed to inspire online orders. Shoppers who enjoyed making purchases on their computers or cellphones became accustomed to loading up their digital shopping baskets with the intent of returning items they ended up not liking.

Shopping online also grew significantly during the COVID-19 pandemic, when homebound consumers reduced their trips to stores and relied on sites like Amazon for everyday items. Retail companies have talked in recent years about returns becoming more expensive to procedure due to the growing volume, rising worth rise and labor costs.

Last year, U.S. consumers returned $743 billion worth of merchandise, or 14.5% of the products they purchased – up from 10.6% in 2020, according to the National Retail Federation. In 2019, returned merchandise was valued at $309 billion, according to setback prevention corporation Appriss Retail.

Last year, roughly 14% of returns were fraudulent, costing retailers $101 billion in losses, according to a joint update from the National Retail federation and Appriss Retail. The issue spans from low-level forms of fraud – such as shoppers returning already worn clothing – to more complicated schemes by fraudsters who profitability shoplifted merchandise or items purchased on stolen financing cards.

To deter excessive returns, some retailers, including H&M, Zara and J. Crew, started charging customers profitability fees in the history year. Others have shortened their profitability windows. Some shopping sites, such as the Canadian retailer Ssense, have threatened to kick frequent returners off their platforms if they suspect abuse of their policies.

However, retailers don’t all view frequent returners in the same way. Such customers could be seen as “excellent returners” if they purchase – and keep – many more items than they send back, Ali said.

“Oftentimes, your most profitable customers tend to be high returners,” she said.