December 29, 2025
Image Courtesy of Macy’s
Should Retailers Be Charging Fees for Mail-In Returns?
Several major retailers now charge customers to return items by mail, even when those items are unopened, unused, and exactly as they arrived. In most cases, returns are free when dropped off at stores.
The cost of returns has risen for retailers as e-commerce has grown. Beyond shipping costs, the cost to process a return can be anywhere from 20%–65% of the item’s original value. The return fees also combat fraud.
Macy’s started charging $9.99 return fees for non-Star Rewards members in 2023.
“Through our Macy’s Star Rewards program, members enjoy free shipped returns as part of their loyalty benefits,” a spokesperson told NBC Chicago. “Customers can still return items to any Macy’s store free of charge.”
Foot Locker similarly offers free returns for FLX Rewards members, while deducting a $6.99 fee from refunds when using its Ready Returns label. L.L.Bean’s returns through UPS or U.S. mail cost $6.50 per package, or are free for customers using an L.L.Bean Mastercard.
JCPenney’s mailed-in returns include an $8 fee. On its website, JCPenney states of the reasoning behind the charge, “UPS will ship your order back to JCPenney for the flat $8 fee. This has been significantly discounted and will cover your entire return from a single order.”
TJ Maxx has charged a fee of $11.99 for return-by-mail since 2023.
Other stores charging for mailed returns include Zara, with a fee of $4.95; J.Crew $7.50; H&M, $3.99; and Urban Outfitters, $5. Kohl’s and Ulta Beauty customers have to cover any return shipping charges. Amazon now only promises “at least one free return shipping option.”
Some Retailers Stick Fast on Free Returns, Mailed or Otherwise
Several major chains nonetheless still offer prepaid labels to cover gratis mailed returns on most items, including Walmart, Target, Costco, Nordstrom, Gap Inc.’s banners, Victoria’s Secret, Sephora, and Apple.
The National Retail Federation’s “2025 Retail Returns Landscape” study done in collaboration with UPS-owned Happy Returns found a majority (72%) of merchants now charge for at least some return options, up from 66% in 2024.
Among the benefits seen from implementing fees for returns from the retailers surveyed was a reduction in overall return rates, cited by 53%; an increase in exchange rates, 52%; shoppers choosing a different, free return method, 51%; recouping revenue from returns, 43%; and a reduction in return fraud, 42%.
On the downside, 47% of the retailers surveyed indicated that implementing fees for returns led to an increase in customer complaints, with 37% saying they’ve lost customers over return fees. The implementation of return fees led to an increase in return fraud for 44% of respondents, and a reduction in exchange rates for 37%.
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Discussion Questions
Do you see more benefits than drawbacks in retailers charging for mailed-in returns?
What’s your overall opinion on when and how much to charge for a mailed return?
Poll
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No. Returns cost money, whether the consumer is charged for it when they try to return a product, or if it is worked into the full cost that the consumer will bear when they purchase a product. How the consumer “sees” the cost of returns is inconsequential. What is important is how it impact the selling price of the product.
I’m skeptical that charging consumers for mailed-in returns delivers more benefits than drawbacks in most retail contexts. While it’s understandable that retailers want to recoup the real costs associated with reverse logistics, imposing fees on returns in a market where consumers have abundant alternatives — from free returns at competitors to buy-online, pick-up-in-store (BOPIS) options — risks damaging both conversion and loyalty. Today’s shopper expects a seamless, low-friction experience, and return policies are a core part of that value proposition. When faced with a choice between a retailer that charges for returns and one that doesn’t, many consumers will simply shop elsewhere, especially for first-time buys or higher-risk categories like apparel and footwear.
Instead of leaning into return fees as a blunt cost-recovery tool, retailers should double down on tactics that reduce the need for returns upfront — because preventing a return is far less costly and far more brand-positive than trying to penalize one after the fact. Better product content (detailed descriptions, size charts, videos), robust customer reviews, virtual fit tools, and stronger pre-purchase engagement all help align expectations with reality and cut return rates organically. Likewise, hybrid fulfillment models like BOPIS and curbside pickup let customers inspect products before leaving the store, which often translates into lower return incidence. These kinds of proactive measures preserve the customer experience while addressing the root drivers of returns rather than trying to tax them after the fact.
In my view, consumers will not tolerate paid mailed-in returns in a competitive marketplace where free returns have become a differentiator, and where choice and convenience are central to purchase decisions. If retailers feel compelled to adjust their return economics, it’s far better to innovate around prevention, clarity, and fit certainty than to impose fees that ultimately shift volume to competitors who offer a more customer-friendly experience.
It’s mind blowing to think that customers have been able to order products then return them with retailers paying return shipping — all without customers paying for this premium service. I don’t know when or how retailers stopped using fundamental business logic — as with how customers will pay for premium services and that charging them for those services is an important foundation of good customer relations. Of course, digital hype has contributed greatly to this mistake — hype I’ve written about in a post about “The Tech Obsession with the Cheap.” (https://www.douggarnett.com/retail/pricing-and-complexity-part-3-the-tech-obsession-with-cheap/)
Yes! it is a multi-pronged approach.
First, consumers mist be weaned off free returns.
Second, if the retail price of the products already reflects to processing of returns those customers who do not return are paying a higher price than they should be paying.
Third, the retailers in question should make it very clear that they attempt to keep their prices as low as possible to all consumers – including those who do not return product – and therefore, are compelled to charge for returns. There are multiple reasons why this is true.
It costs the retailer money to process returnsA return that sits in the customers home for three weeks (I picked a number) loses its value with time and may, in fact, miss the entire selling season.The item being returned may not be resalable because of its condition
Retailers unintentionally conditioned consumers to expect something that is not practical and now must work to reverse course.
Consumers still expect retailers to provide free return labels, because it’s a shopping and convenience experience barrier otherwise. From a shopper point of view, the math & logic for free return labels is this – they didn’t drive to the store and use the store utilities, nor the higher costs of retail rent/backroom space, nor the labor of in-store shopping experts, nor the store packaging. The shopper will expect some of these savings are already baked into the cost structure of the online/mail shopping experience.
Amazon still leads other retailers in free returns. So unless a customer is a notorious frequent merchandise return liability, most retailers will follow, and still allow for free returns in the forseeable future.
Year-in-year-out we all nod our heads that returns are undesireable, and the whole schema of free everything has to change, yet whenever even a trival change is made toward correcting that, reaction sets in. So if I may rephrase the question: Should Retailers Be Charging Fees for Mail-In Returns? Should retailers continue to do things that lose money simply because someone argues “they have to”?
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No. Returns cost money, whether the consumer is charged for it when they try to return a product, or if it is worked into the full cost that the consumer will bear when they purchase a product. How the consumer “sees” the cost of returns is inconsequential. What is important is how it impact the selling price of the product.
I’m skeptical that charging consumers for mailed-in returns delivers more benefits than drawbacks in most retail contexts. While it’s understandable that retailers want to recoup the real costs associated with reverse logistics, imposing fees on returns in a market where consumers have abundant alternatives — from free returns at competitors to buy-online, pick-up-in-store (BOPIS) options — risks damaging both conversion and loyalty. Today’s shopper expects a seamless, low-friction experience, and return policies are a core part of that value proposition. When faced with a choice between a retailer that charges for returns and one that doesn’t, many consumers will simply shop elsewhere, especially for first-time buys or higher-risk categories like apparel and footwear.
Instead of leaning into return fees as a blunt cost-recovery tool, retailers should double down on tactics that reduce the need for returns upfront — because preventing a return is far less costly and far more brand-positive than trying to penalize one after the fact. Better product content (detailed descriptions, size charts, videos), robust customer reviews, virtual fit tools, and stronger pre-purchase engagement all help align expectations with reality and cut return rates organically. Likewise, hybrid fulfillment models like BOPIS and curbside pickup let customers inspect products before leaving the store, which often translates into lower return incidence. These kinds of proactive measures preserve the customer experience while addressing the root drivers of returns rather than trying to tax them after the fact.
In my view, consumers will not tolerate paid mailed-in returns in a competitive marketplace where free returns have become a differentiator, and where choice and convenience are central to purchase decisions. If retailers feel compelled to adjust their return economics, it’s far better to innovate around prevention, clarity, and fit certainty than to impose fees that ultimately shift volume to competitors who offer a more customer-friendly experience.
It’s mind blowing to think that customers have been able to order products then return them with retailers paying return shipping — all without customers paying for this premium service. I don’t know when or how retailers stopped using fundamental business logic — as with how customers will pay for premium services and that charging them for those services is an important foundation of good customer relations. Of course, digital hype has contributed greatly to this mistake — hype I’ve written about in a post about “The Tech Obsession with the Cheap.” (https://www.douggarnett.com/retail/pricing-and-complexity-part-3-the-tech-obsession-with-cheap/)
Yes! it is a multi-pronged approach.
First, consumers mist be weaned off free returns.
Second, if the retail price of the products already reflects to processing of returns those customers who do not return are paying a higher price than they should be paying.
Third, the retailers in question should make it very clear that they attempt to keep their prices as low as possible to all consumers – including those who do not return product – and therefore, are compelled to charge for returns. There are multiple reasons why this is true.
It costs the retailer money to process returnsA return that sits in the customers home for three weeks (I picked a number) loses its value with time and may, in fact, miss the entire selling season.The item being returned may not be resalable because of its condition
Retailers unintentionally conditioned consumers to expect something that is not practical and now must work to reverse course.
Consumers still expect retailers to provide free return labels, because it’s a shopping and convenience experience barrier otherwise. From a shopper point of view, the math & logic for free return labels is this – they didn’t drive to the store and use the store utilities, nor the higher costs of retail rent/backroom space, nor the labor of in-store shopping experts, nor the store packaging. The shopper will expect some of these savings are already baked into the cost structure of the online/mail shopping experience.
Amazon still leads other retailers in free returns. So unless a customer is a notorious frequent merchandise return liability, most retailers will follow, and still allow for free returns in the forseeable future.
Year-in-year-out we all nod our heads that returns are undesireable, and the whole schema of free everything has to change, yet whenever even a trival change is made toward correcting that, reaction sets in. So if I may rephrase the question:
Should Retailers Be Charging Fees for Mail-In Returns?Should retailers continue to do things that lose money simply because someone argues “they have to”?