Returning holiday gifts is becoming more accessible, thanks to a new trend among retailers. Leading the charge, Walmart and Target are adopting "returnless" or "keep it" policies, revolutionizing how customers handle unsatisfactory purchases.
Now, shoppers can keep their items while still receiving refunds. This approach might seem too generous, but it's a win-win: customers enjoy hassle-free returns, and stores benefit from reduced processing costs and enhanced customer satisfaction.
"Keep It" Policy: Walmart and Target Customers to Get Returns and Refunds
The internet and e-commerce have changed holiday gift-giving. Now, distant family and friends can send gifts that may not work, giving you time to pretend to appreciate them.
Online gifting eliminates the need to hide your disgust over undesirable gifts like an unflattering sweater, a novelty tie, or a celebrity poetry book.
This modification in gift exchange may improve relationships, especially for people who struggle to choose. However, retailers face difficulties from this tendency. They receive more returns from improper gifts, ill-fitting products, and unwanted gifts.
Retailers often find returns costly, leading them to let customers keep certain items to avoid losses, explains Sender Shamiss, CEO of goTRG, on CNBC's Squawk Box. He notes that this usually applies to things costing around $20 or less.
A goTRG survey of over 500 U.S. retailers shows a 59% adoption of "keep it" policies this holiday season, up 26% from last year. According to Navar, major retailers like Walmart, Target, Amazon, Wayfair, Chewy, Kohl's, and Shein are embracing this approach.
Retailers' terms for returnless policies differ, but the item's price often determines if customers can keep it. Items costing more to ship and process than their value are typically eligible for these policies.
In goTRG's report, 27% of retailers allow keeping returns under $20, and 21% extend this to items up to $30. For returns costing up to $50, 14% of retailers apply returnless policies. This approach reduces costs and increases customer trust.
Shoppers should check if stores offer these policies for more straightforward holiday returns.
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Holiday "Keep It" Policy Drawbacks
"Letting customers keep items they do not want might seem like it saves money, but it overlooks the real problem," says Neil Saunders, Managing Director of Global Data Retail.
In his post on RetailWire, he explains that giving away products for free still affects the company's profits.
Saunders points out that this approach might be considered a regular expense for online businesses, but it does not address why customers return items in the first place.
He emphasizes the need for retailers to improve in areas like providing accurate clothing sizes, detailed product information, and high-quality images.
Saunders also pointed out that "keep it" policies might unintentionally worsen return issues. "Such policies risk creating a moral hazard, where people might exploit the system or make less thoughtful purchasing decisions," he added.
Bob Amster, with 45 years in retail, shared similar concerns. "The 'keep it' approach is just a temporary fix in a flawed returns policy," he wrote.
"It's a choice between two bad options: either the retailer bears the cost of shipping and processing returns, or they give away the product. But this isn't the right way to do business."
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