Retailers have been dealing with a surplus of returns since the pandemic and, as a result, some have implemented strict policies.
Amazon, Macy’s and Walmart have updated their store return policies in response to the wave of returned items in recent years.
3
3
3
A total of 81% of retailers have launched pay-for-return policies in 2023 in some form, according to CNBC.
The new measures include higher return rates, shorter return periods and, for some stores, considering products “non-returnable”.
Walmart, for example, added a new return policy for major appliances, giving customers two days to return certain items, Consumer World reported.
Macy’s has added a $9.99 return fee for shoppers who are not part of the Star Rewards membership program.
READ MORE ABOUT RETAIL STORES
Macy’s also reduced its toy return period from 90 days to 30 days just before the start of the 2023 holiday season.
Some stores are even banning certain shoppers from returning products after partnering with a third-party system that tracks customer return behavior.
Through third-party companies, customers are tracked every time they return an item.
The third-party company then has the right to refuse a refund to customers if the company detects questionable return patterns, Wall Street Journal reported.
One popular third-party company, The Retail Equation, places limits on customer returns based on a score given to the customer after tracking their purchasing habits.
In 2018, a Best Buy shopper returned three phone cases after purchasing extra colors for his children to choose from.
When he went to make the return, the employee informed him that despite returning the cases within the return period, he would be prohibited from making any returns or exchanges for the remainder of the year.
If he wanted to fight the ban, he needed to contact The Retail Equation.
Other customers have reported having similar experiences, like the Best Buy customer, with some even filing dismissed lawsuits against Retail Equation.
Best Buy stopped working with Retail Equation in 2019, but some retailers still use similar third-party companies.
Increased restrictions on returns may seem extreme, but the retail sector has been hit hard by an excess of returns over the past two years.
Last year, consumers spent more than $5 trillion at retail stores, according to the National Retail Federation.
Of these sales, US$743 billion was returned.
“Most returns cost up to 40% of the original retail price to get the item back on the shelf,” said Robert Overstreet, assistant professor of supply chain management at Iowa State. CNBC.
“There’s no guarantee they can sell it for what they originally asked for, so they’re losing money on both sides.”
The US Sun contacted Walmart for comment on its return policies.
AI AND RETURNS
A study has shown how AI-based returns models can limit losses and improve the customer shopping experience.
AI can analyze each shopper’s habits to create a personalized return policy that responds to their actions.
For example, researchers pointed to a shopper who typically buys six items and then returns five, perhaps after using them.
AI technology could recommend a policy for the customer that limits how many returns they can make in a year.
Another hypothetical customer who frequently purchases large baskets of products and returns only a few low-priced items each year might have a very lenient return policy.
The study suggested marketing opportunities built into the personalized policy for loyal customers, such as offering 20% off a purchase made on the same day of return, which would lead to another sale for the business.
AI-based policies would allow retailers to adjust to shopper behavior with automatic warnings issued if they begin abusing return privileges.
One researcher summarized the strategy as rewarding top buyers with flexible return and rewards policies while closely monitoring customers most likely to harm the business.
This story originally appeared on The-sun.com read the full story
