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Are the Shorter Holiday Return Windows Necessary?
Seeking to reduce the high cost of returns, retailers are not only increasingly charging shipping fees for online returns but also shortening the time customers have to bring back the merchandise.
Among major retailers, Amazon in 2022 allowed purchases made on Oct. 11 through Christmas to be returned by the end of January. This year, the online retailer will only take back items bought on or after Nov. 1. Under the change, purchases made during Amazon’s Big Deal Days event from Oct. 10 to 11 can no longer be returned.
Amazon told the Wall Street Journal that it is returning to its pre-pandemic holiday-returns policy. Outside of the holiday period, Amazon allows returns within 30 days of a customer receiving their order.
Staples’ shoppers in the 2022 holiday season had until Jan. 23 to return goods bought after Nov. 12. This year, shoppers have until Jan. 14 to return items purchased Nov. 13 or later.
Around certain categories, Macy’s return window this holiday season for toys shrunk to 30 days from 90 days in 2022. Additionally, Walmart’s return window for major appliances has been cut to within two days.
According to the 2023 Holiday Predictions report by goTRG, 41.8% of retailers reported planning to shorten their holiday returns windows versus only 16.8% planning to extend their returns windows.
“Most stores continue to offer extended holiday return periods whereby gifts purchased as early as October first, such as in Walmart’s case, can be returned until mid- to late-January, considerably beyond the normal deadline, but they’re not as generous as they used to be,” Edgar Dworsky, founder of consumer-advocate website ConsumerWorld.org, told Checkbook.
The shorter return windows are part of retail’s recent efforts to reduce the high costs of returns due in large part to e-commerce growth. According to retail services firm Inmar Intelligence, retailers spend $27 to process a return for a $100 item that was purchased online. The faster an item is returned, the better chance retailers have to offer it to other customers to avoid a steeper markdown.
Retailers have also been ending free online returns to reduce the cost of returned merchandise. About 40% of retailers are now charging to ship an online return, up from 31% last year, according to Narvar.
Return windows vary across retailers.
Under Best Buy’s extended holiday return policy, any purchases made from Oct. 27 through Dec. 30 have to be returned by Jan. 13. Its standard return time frame is within 15 days. At Walmart and Macy’s, most purchases made from Oct. 1 through Dec. 31 are returnable until Jan. 31. Marshalls and T.J.Maxx accept holiday returns until Jan. 25. Target, Costco, and Home Depot have 90-day return windows for most items.
Among those with the most generous policies, Kohl’s allows most items to be returned within 180 days of purchase. Eddie Bauer, IKEA, L.L.Bean, and Zappos accept returns within a year. Nordstrom’s full-line stores, American Eagle, and Patagonia have no time limit for returns.
Discussion Questions
Do you see more benefits than drawbacks in the shrinking of holiday return windows for retailers? Do you generally lean toward more stringent or generous return time limits?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Zel Bianco
President, founder and CEO Interactive Edge
Shortening holiday return windows benefits retailers by cutting costs, streamlining processes, minimizing storage costs, ensuring faster resale and faster cash flow . However, drawbacks include potential customer dissatisfaction, inconvenience during the busy season, deterring potential customers and challenges for gift recipients.
Despite operational advantages, I lean towards a more generous return time limit. Prioritizing customer satisfaction builds loyalty, positive brand perception, and fosters long-term success, as happy customers are more likely to return, potential loss of customer loyalty and recommend the retailer to others.
Your comment should be a mantra for all retailers. “Prioritizing customer satisfaction builds loyalty, positive brand perception, and fosters long-term success, as happy customers are more likely to return, potential loss of customer loyalty and recommend the retailer to others.”
The shrinking of returns windows is part and parcel of retailers trying to cut down on the cost and complexity of returns. As understandable as this is, extended holiday returns exist because a lot of people buy things as gifts and so returns are not made until after those items have been given to others. People are also on the move and busy during the holidays, so making returns can take customers longer. Most stores still offer fairly generous holiday returns, but as retailers have been nudging shoppers into buying earlier with October discounts and deals, shrinking the window seems a bit disingenuous.
There are both up- and downsides to shortened periods: i.e. they “make sense”. Howver, there is absolutely no logic to setting a specific date for a period that lasts over two months: a person who buys on Dec 31 gets (only) two weeks, but the same purchase two months earlier gets ten weeks?? How stupid is that!
Shrinking the return window clearly benefits retailers by reducing the amount of returns and by improving their chances of reselling the returned goods. However, shrinking return windows puts more pressure on consumers to act sooner, and as a result, some consumers will be stuck with items they hoped to return. Overall, I lean to reasonableness when it comes to returns, which means balancing customer service with practicality for the retailer. Retailers should offer a reasonable, hassle-free return period of 30-45 days. While excessively long returns windows provide a compelling selling message for buyers and competitive differentiation, I believe that these policies invite abuse and are unreasonable for the retailer.
Holiday returns have an entirely differnet equation than returns on normal sales.
For the balance of the buying year, whatever the return policy is, it should be “loud and clear” before checkout. Too many retailers leave the return policy to the smallest print on the receipt. (Are they trying a gotcha?) When you try to return outside the said period, the clerk refers to the receipt, telling you the policy is written right here.
Generous return policies encourage sales. The customer should not be frustrated by the retailer. In that meeting, to address the expense of returns, shortening the period may sound like the easy solution, but supporting the customer in making the correct purchase decision will bring a bigger payoff.
The customer is not the enemy.
This is good business, and I do not see any downside to making this change. Consumers might grump about it, however the new normal will work in the long run, and retailers will be better off for the change.
Consumers need to be fair and allow retailers to maintain return policies that are reasonable. If the return policy is too liberal, consumers are likely to procrastinate and the retailer is stuck holding the bag. Perhaps Kohls is too liberal, but Walmart allowing only two days on major appliances is too restrictive. A healthy balance is what many retailers are attempting to strike this year.
In general, there’s no doubt this is mostly about cutting costs.
I think in Amazon’s case, it’s a slightly different story. Shoppers used the “Big Deal Days” event to order items that looked to be priced right….but then they had the whole rest of the holiday season (up to and including Super Saturday) to find a better gift. It’s sort of a new form of cherry picking.
It’s going to be slightly irritating to procrastinating consumers like me….but there’s nothing unreasonable in this decision. Retailers just have to be careful about making the window too short on the back end. If you walk into a store and they have no one to take your return, but the shopper can see they had someone to put out Valentine’s Day goods (?!) you’ll have cranky customers.
I’m sure that retailers imposing tighter return windows have done the math, and would rather incur the handling costs and reverse logistics more efficiently. But those merchants with more forgiving return policies are generating goodwill even if 90% of customer returns still happen within 30 days of the holidays.
While I understand a retailers need to curtail returns, its return policy is an important factor in where consumers choose to shop. And how early they choose to shop.
Consumers aren’t stupid. They will avoid stores that have a severely limited return policy. They don’t want to be stuck with goods they don’t want either.
However, the market will find the level called ‘reasonable’ time to return merchandise post holiday and that, will become the “new normal.”
Agreed. This is especially true around the holiday period when consumers are more conscious of returns policies.
Healthy relationships include boundaries. As the cost of returns rises, more retailers are rethinking the limits of their generosity with consumers.
Shrinking holiday return windows helps retailers protect margins by reducing the cost of returns. Shorter return windows shape consumer behavior, dissuading bracketing and encouraging shoppers to pay closer attention to product specifications before buying.
I’m betting that most people know within 5 minutes of opening a gift whether they are going to keep it or not. Maybe a day or two if it’s apparel and they need to try it on. So giving customers deadlines between mid January and end January sounds perfectly reasonable. It’s not about making the decision, it’s about taking the action.
Product returns remain one of the key components of the customer experience. A bad return experience could have significant consequences. Establishing a strict holiday returns process may make sense in terms of getting ahead of operational costs, reducing the costs to serve, and managing the talent to meet the surge or returns.
However, while being fully transparent with the returns process, retailers must be somewhat flexible and focus on the overall customer experience. Strict return policies are necessary for many reasons, especially in today’s economy. Yet, consumers have an abundance of choices, both via in-store and digital commerce and will take their business elsewhere if the returns process is overwhelming.
There is a delicate balance between retailers reducing the costs to serve while providing outstanding or, at the least, friction-free customer experiences. Those who get it right will benefit significantly. Customer loyalty is a fragile thing, and retailers have to be mindful of this.
I can see where retailers are coming from in terms of cost savings on a number of fronts in reigning in generous return policies. However, not only are we in an era of blended channels, but in a race to capture those valuable holiday purchases, retailers are shifting sales earlier and earlier. Say a consumer has completed their shopping prior to Halloween to take advantage of great deals, shorter lines and the satisfaction of completion. They go to return some of these items in the days after Christmas, tags on, with receipts and are denied. There is a big risk in damaging or even destroying the customer relationship and erasing customer lifetime value over purchases made only a couple weeks earlier than the shorter window. I think a more nuanced approach would be far more beneficial than blanket rules and timing that almost no consumer is going to remember.
The trend of shortening holiday return windows by retailers, while understandable from a cost perspective, overlooks the essential role of customer satisfaction and loyalty. The holiday season is hectic, and customers often buy gifts well in advance. Shorter return periods can lead to increased stress and dissatisfaction, especially for those receiving gifts. Retailers should consider a balanced approach that respects the customer’s need for flexibility while managing their own operational efficiencies. Prioritizing customer experience, especially during the holidays, can foster long-term loyalty and positive brand perception, which are invaluable for sustained success.
This is smart for retailers to help manage inventory, lessen returns, and better align accounting. As long as returns aren’t out of the question, I think shortening the windows is just fine and it will help consumers learn they can’t be returning items months and months later.
I think a balance is needed. It would also be nice to see some standardization. One retailer offering 2 days versus another offering 180 can get frustrating to consumers. I think 30-60 days is reasonable. Over the holiday’s I went to one store that normally allows 60 days for returns, made exception for Christmas items. That return policy was that any Christmas item such as a yard display or wreath, needed to be returned before December 23rd. This makes total sense to me.
The benefits to the retailers are obvious. I think in some ways, although the consumer might be frustrated at first, it would also lead to less procrastination.
I wonder what percent of returns occur in more than 30 days. The question is whether the incremental cost of returning items in more than 30 days exceeds the potential cost in customer equity. Most likely, the overwhelming number of returns occur in the 30-day window anyway. In addition, the ability to resell items does not significantly change from Jan 15 to Jan 30. It seems like the company is attempting to reduce employee expenses and is willing to sacrifice goodwill in exchange. Over a year, it will be possible to measure the decline in customer value from customers defecting after attempting to return items unsuccessfully. Only in that way will the actual cost of this policy be understood.
The general public will of course blame retailers for new return policies but the truth of the matter is that retailers cannot afford the status quo. The public needs to understand the challenges and liabilities facing most retailers today. Returns wipe out margins and profits.
Consumer will deal with tighter return policies if retailers are reasonable about how the policies are communicated and handled.
Retailers need to make sure their return policies are visible on the product description page, in FAQ, on top of home page banner, and elsewhere.
Retailers should clearly identify which products can and cannot be returned, and inform customers what condition they’re willing to accept for returns, and be lenient with terms, and leave room for flexibility in certain circumstances. Db
In my opinion, the shrinking of holiday return windows has both benefits and drawbacks for retailers. On the positive side, shorter return periods help reduce the high costs associated with processing returns, especially in the booming eCommerce landscape. This will enable retailers to quickly make the returned items available for resale, thus, minimizing the need for markdowns.
However, the drawback is that it might add inconvenience for the customers who may need more time to return their items. I would say a balanced approach is vital here, with slightly more lenient return time limits during the holiday season to accommodate the gift-giving nature of certain items. Striking a balance is of utmost importance to not only ensure cost efficiency for retailers but also make sure that the customer experience is not compromised.
There will be drawbacks for brands experimenting with their return policies to improve margins and better manage inventory and resources. Brands need to be mindful of how the average consumer shops today – primarily online. Because of this, consumers can only physically interact with the product once they receive their shipment and might not know if they like the size, color, etc. until they have a chance to see it off-screen. Consumers have come to rely on the convenience of flexible return policies.
When evaluating their return policies, whether it be the window of time or potential shipping fees customers incur, brands need to be mindful of the long-term impact of the loss of a frustrated customer.
While these changes are becoming more common, not all brands will go in this direction. If a consumer becomes frustrated with one brand’s policies, they’ll simply move on to shopping elsewhere. Brands will need to find the balance that ensures customer retention.