RLA News & Views

Companies like Amazon, Walmart, and Target give some customers no-return refunds, but the practice is likely a temporary solu

December 12, 2021

Yahoo News, December 12, 2021:  "When companies tell customers to keep a product, that's the most expensive way of handling returns," Cathy Roberson, research manager for the Reverse Logistics Association, told Insider.

As shipping and warehousing rates tick ever higher, there might not be much of a choice at this very moment, but Roberson said 2022 will likely bring a reckoning for how retailers handle returns and refunds.

Roberson also said that even some higher-dollar items like electronics or clothing can lose some of their financial luster when they have to be subjected to a process called "disposition," which is the individual inspection of a returned item to determine whether it should be resold, refurbished, or recycled.

According to RLA's returns calculator, the cost of returns can quietly gnaw roughly 6% off of total sales — a number that can put a serious dent in a company's profitability.

In recent earnings calls, companies like Target and Home Depot have touted the growing role of their physical stores in fulfilling ecommerce orders, and Roberson agreed that physical stores could begin to play a larger role in handling returns.

In other words, just as companies like Macy's subtly nudge customers to absorb the last-mile expense with free shipping to a nearby store, companies could begin requiring shoppers to bring their returns there too.

"Retailers are not going to keep this up," Roberson said regarding no-return refunds. "They simply can't afford to."