Abuse of Return Policy Hurts Everyone - I Told You So

One of the most popular articles I’ve ever written was a warning about retail return policies. I don’t exactly know why the subject of return policies seems to trigger such a response in people but it does.

​In short, buying something from a store and then returning it even if there is nothing wrong with it is unethical. It is like walking into a restaurant and breaking a window for no good reason. You are destroying the property of a business. Any retailer which receives a returned product has material which needs to be destroyed, gifted to charity, or sold at a steep loss. 
 
I know this to be true because I’ve accounted for the loss on returns at multiple Fortune 500 level companies. 
 
But I’m not going to get into all the detail again. You can read my diatribe from 2017 here.
 
I bring this subject up again to say that “I told you so”. Amazon is finally trying to get a grip on the high cost of returns and is starting to institute a return fee. This is only the beginning. 

Here is an excerpt from the Axios article linked above:

Consumers should expect more retailers to give up on free online returns because of how much stores lose on those products, Babson College professor and retail expert Lauren Beitelspacher tells Axios.

• Returns accounted for $816 billion in lost sales, or 17% of total sales in 2022, up from 11% in 2020, according to the National Retail Federation.
• “When you buy it online, it has to go back to the fulfillment center, back through the distribution center, back into inventory — and honestly the chance of it being resold are very small,” she says. "It’s not sustainable for retailers," Beitelspacher said.

​But I firmly believe that if people only returned items when it was warranted, Amazon’s fee would never have been introduced. It is widespread abuse by people who use free returns as a free rental program. A few people can be absorbed. But if this trend grows, it threatens overall profitability and needs to be stopped. 
 
That is why I’m passionate about this subject. Abuse by a minority of the market ends up hurting the honest customers too. Everyone pays for their returns via higher prices. And now everyone suffers if the free return policies start to go away.