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.