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October 18, 2024
Who’s Making the Best Decision for Holiday Returns: Walmart or Amazon?
Holiday returns can make or break a customer’s shopping experience, and with competition fierce, retailers are looking for ways to balance convenience with profit protection. Both Walmart and Amazon have extended return policies for the 2024 holiday season, but they differ in length and flexibility, raising questions about which approach will better satisfy customers without hurting the bottom line.
Walmart’s 2024 Holiday Returns Policy
Walmart has announced an extended holiday return policy for purchases made between Oct. 1 and Dec. 31, 2024. Customers will have until Jan. 31, 2025 — or 90 days after the original purchase — to return most items bought in-store or online during this period, offering greater flexibility for holiday shoppers.
The retailer also released a holiday checklist for its Marketplace sellers on Oct. 8, 2024. The same extended return window will apply to Walmart Marketplace sellers during the holidays. To ensure a smooth returns process, sellers are encouraged to include packing slips with all items shipped. They should also offer free returns for eligible products, both in-store and online. Additionally, enabling options such as Keep it, Partial Keep it, and Replacement can provide cost-efficient solutions for returns.
Amazon’s 2024 Holiday Returns Policy
Amazon has also announced an extended return window for the upcoming 2024 holiday season, reflecting its commitment to accommodating early holiday shoppers. However, its window is shorter than Walmart’s. Items purchased between Nov. 1 and Dec. 31, 2024, from Amazon will be eligible for return until Jan. 31, 2025. However, Apple brand products have a shorter return window, allowing returns only until Jan. 15, 2025.
This return policy applies across all order types, including those fulfilled by sellers, Fulfillment by Amazon (FBA), and Amazon Retail. While the return window is longer than the normal 30 days (compared to Walmart’s 90-day normal return window for most non-Marketplace items, excluding electronics), the eligibility criteria for returns will remain unchanged. Customers can find detailed information regarding return eligibility for specific categories by visiting Amazon’s return policies page.
Returns During the Holidays
There are plenty of reasons why customers make returns. Anything from not liking the product or changing their mind about it to “bracketing,” which is when multiple sizes of a clothing item are bought to try them all out and see which size fits best. Afterward, only the desired size is kept and the rest are returned. During the holidays, returns can increase further as people receive gifts that don’t fit or aren’t to their liking.
Last holiday season, many retailers went so far as to start charging return fees to help protect profits.
According to Digital Commerce 360, Rob Garf, vice president and general manager of retail and consumer goods at Salesforce, said in December last year that return rates were projected to rise as much as 20% in the weeks following the 2023 holiday season as customers returned unwanted gifts. Following a significant surge in holiday returns in recent years, Garf anticipated a modest increase from the previous year’s figures. In 2022, global returns accounted for 13% of total orders during the holiday period, marking a 63% year-over-year rise. In response to this spike, many retailers adjusted their return policies to protect profit margins. However, Garf warned at the time that overly restrictive policies could harm customer service and overall shopping experiences.
As reported by CNBC in January this year, a survey by Appriss Retail and the National Retail Federation showed that retailers estimated that 13.7% of returns in 2023 — valued at $101 billion — were fraudulent. During the peak holiday season, the rate of fraudulent returns was even higher, projected at 16.5%, amounting to $24.5 billion.
Retail returns pose a multitude of challenges for businesses, from managing profits to mitigating fraudulent returns and addressing customer dissatisfaction. As the holiday season approaches, an extended return window can create additional opportunities for retailers to enhance customer loyalty and satisfaction. By allowing customers more time to return items, for example, Walmart not only boosts the likelihood of positive shopping experiences but also encourages repeat business. In contrast, Amazon’s shorter return window may help mitigate some of these profit and excessive returns challenges but could limit its potential for fostering long-term customer relationships.
Discussion Questions
What strategies can retailers use to balance the financial impact of extended return policies while enhancing customer satisfaction during the holiday season?
How do the varying return policies of major retailers like Walmart and Amazon reflect broader trends in consumer behavior during holiday shopping?
In what ways can retailers utilize data analytics and customer feedback to refine return processes and minimize fraud, ensuring a seamless experience that fosters repeat business?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Georganne Bender
Principal, KIZER & BENDER Speaking
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As many consumers are starting their holiday shopping earlier, they want peace of mind that they will be able to make returns once the holiday is over. This is particularly important for gifts that may not be opened until Christmas. Extended returns windows make sense in this context and they’re an important consideration for shoppers among other things. Both Walmart and Amazon have good schemes, but Walmart’s is somewhat more generous in that it starts earlier and covers the discount weeks in October.
Whose return policy for the holidays is better, Amazon or Walmart? I think it’s a tie, and both policies are excellent. Since Walmart is still more a traditional retailer than Amazon, I believe their more extended policy is the right fit. In contrast, the Amazon policy is better for e-commerce.
As long as the returns are free and easy to do, the differences in time shouldn’t feel that significant to the shopper. That said, the longer window will always be more helpful and appreciated.
I suspect Amazon’s later start to their holiday return window has something to do with their Prime shopping event in October and wanting to keep those purchases outside the extended return window. That said, both policies are good for consumers. Retailers should take note that while there is a strong desire to offset returns costs by charging fees to consumers, it continues to be true that consumers dislike this and are more than willing to take their shopping to retailers with free returns. Charging return fees is a fast path to customer churn, especially with the holiday shopping season upon us.
Walmart wins this competitive shoot-out with Amazon, with a longer return policy and more locations to make the return. Further, the ability to make the return in-store and then immediately swap it for another item definitely improves CX here.
All of these return options are reasonable. Obviously, an extra 30-day headstart with Walmart seems a bit more liberal, but in the end, almost two months prior to the Christmas holiday is fair. And whether it’s Jan 15 for Apple products (20 days after Christmas) or Jan 30 for everything else, does that deter a customer? I don’t think so. All of these return policies are liberal and hassle-free. That’s the key.
As for returns overall, the brands must crack down on dishonest returns. They cost money, which is passed on to the consumer. Find a way to deter dishonesty and you find a way to be more competitively priced
Both Walmart and Amazon’s return policies are fair, and both give consumers enough time to return gifts.
An extended holiday return window is a big part of why we choose one retailer over another. And it’s not just about extended dates. Inflexible policies that do not allow refunds only hurt the retailer.
Extended return policies can work if retailers are smart about reducing the cost. Utilizing stores for “buy online, return in-store” helps curb return expenses and makes the process more efficient. Plus, when customers come in to return, it’s a great opportunity for cross-selling or upselling. Offering alternatives like exchanges or store credits can keep customers happy while also driving additional sales.
Walmart’s longer window is good for customer satisfaction but risky for profits, while Amazon’s shorter window might save them some losses but could lose them repeat business. I think in the long run, retailers can leverage analytics to track patterns and spot fraudulent behavior early to refine policies without harming the shopping experience.
It’s great to see windows extended so people have a moment to take a breath after the holidays. What I don’t see addressed here is the type of credit that is issued with these returns. Is it a gift card, cash for cash purchases or credit to the credit card used to purchase based on the type of receipt? For those issued gift cards, is there an accounting of the utilization of those gift cards?
Both Walmart and Amazon are taking distinct but strategic approaches to holiday returns, reflecting broader trends in retail landscape. I feel, as some of my fellow industry colleagues already expressed, WMT’s “Holiday Guarantee” aims to enhance customer experience. While AMZN’s stricter policies indicate a push to reduce ops costs and policy “abuse”. Bricks & Mortar vs E-Comm? Perhaps holding true to their core value prop?
People return stuff, and both of these policies are consumer friendly so I see no “winner” or “loser” here. What is somewhat depressing is the amount of stuff people buy who cannot really afford it…we are not commenting about Nordstrom’s return policy, or Tiffany’s, but two companies that technically sell to everyone but target the middle and lower classes.
The old “keeping up with the Jones family” still moves us to make bad choices as consumers. Amazon and Wal Mart are simply adopting policies to support those demographics.
Retailers must provide some sense of reasonable time frames for customers to decide if they want to keep items, especially if they travel during the holidays for extended periods. Both Amazon and Walmart have clear return programs. Amazon does a great job for the CX in visibility and steps to both delivery and returns. But Walmart gives a more generous period of time.
Continuing to give customers ample input options and explanations in feedback will continue to serve companies well as they learn, moderate, and adjust their programs for better outcomes.
Extended return policies certainly give customers more flexibility. However, with return rates spiking during the holidays, retailers face the challenge of balancing customer needs with protecting their bottom line. By focusing on smarter strategies, like using data to enhance return processes and catch fraud early, retailers can support honest returns while minimizing financial impact.
Amazon wins this one. Walmart’s Marketplace sales are its Achilles heel. They have a checklist that suggests free returns but, “Surprise!” If you didn’t look carefully to understand you were buying from a Marketplace seller and not Walmart, you could be subject to a different return experience that might include return fees. And there are a lot of Marketplace sellers on Walmart.com. Amazon covers all sales with the same policy.