New York CNN –
If you're thinking about returning a disappointing gift you just received over the holidays, The return could bring even more disappointment.
Americans have grown accustomed to free returns, but a growing number of retailers are charging fees as returns eat into retailers' profits.
Macy's, Abercrombie, J. Crew, H&M and other companies all charge additional shipping fees for returns by mail.
And it's not just the big mall brands. According to Happy Returns, a logistics company specializing in returns, 81 percent of retailers now charge a fee for at least some return methods.
Amazon has started charging customers a $1 fee when they return items to a UPS store if there is a Whole Foods, Amazon Fresh or Kohl's grocery store near their delivery address. (Amazon owns Whole Foods and Fresh and has a partnership deal with Kohl's.)
Amazon also recently started flagging products that are frequently returned on its website. Amazon adds the badge to product listings of items that have “significantly higher return rates for their product category,” a spokesperson said.
Return rates have skyrocketed in recent years as shoppers buy more online. According to experts, shoppers are more likely to return purchases that they haven't seen or tried on in person.
According to the National Retail Federation, customers returned nearly 17% of the total goods they purchased in 2022, totaling $816 billion. That was up from 8% in 2019.
In order for customers to return their products, companies have to bear high shipping costs. Sometimes these items end up back in retailer warehouses or on shelves. Stores then have to discount returned goods in order to sell them, further reducing their profits. All of this hurts companies’ profits.
More often, returned products end up in liquidation warehouses or even landfills, posing a threat to the environment.
In some cases, stores allow customers to keep their returns rather than send them back – low-cost, bulky items such as furniture, kitchen appliances, home accessories, baby chairs, walkers, strollers and other items where the cost of shipping is costly to the retailer for the return.
Americans increased their spending this holiday season, but at a slower pace than last year. Retail sales rose 3.1% from November 1 to December 24 compared to the same period last year. That's according to data released Tuesday from Mastercard SpendingPulse, which measures in-store and online retail sales across all payment types.