How stricter return policies change the way we shop
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Illustration: Gabriella Turrisi/Axios
January is coming to an end, which means the window to return holiday gifts could also be closing.
Why it matters: "Returnuary," as many retailers call it, has become more expensive for companies, and as a result, they've implemented more stringent return policies that can make it difficult to get a full refund or even store credit.
State of play: Free returns are no longer the default — in 2024 about 66% of retailers started charging for returns to offset costs.
By the numbers: Returns cost retailers about $890 billion in 2024, up from $309 billion in 2019, according to the National Retail Federation (NRF), as the annual return rate last year was nearly 17% up from the historical average of 13%.
- 76% of shoppers consider free returns a key factor in their decision on where to buy.
- 67% say a bad return experience would discourage them from shopping with a retailer again.
Case in point: "There are some companies now that require customers to purchase 'return insurance' to be able to potentially return items. If I can't return something for free or [use] something like Happy Returns, or have a store nearby where I could do so in person, that purchase is an automatic no," reader Melanie Bartelme tells Axios.
- "I have experienced more hoops to jump through when it comes to returns. The most obvious one has been Amazon, which now makes you go through a questionnaire about your return. I refuse, though, to let that deter me even if it's just a $20 item," reader Lisa Shames said.
- Other readers told us some sellers will refund them but tell them to keep the original item rather than send it back.
Zoom out: Some of the cost concerns come from "fraudulent returns," which have become so prevalent companies have given the behaviors nicknames, RR Donnelley retail and consumer behavior expert Chip West tells Axios.
- "Wardrobing" is when people buy a piece of clothing, hide the tag, wear it once and return it.
- "Bracketing" is mostly done online when shoppers buy multiple sizes and colors of an item fully intending to send most of the items back.
What they're saying: West says retailers that shift their policies are probably doing it gradually to avoid shocking customers too much and driving them away.
- "If something was 90 days, it might be 60 days now. 60 days, it might be 30 days now. Store credit makes a lot of sense because if you go into a store and use credit, they'll probably spend more, right? So that's actually a good thing for retailers."
What we're watching: Improving consumers' returns experience tops the list of retailer business goals in 2025 so that customers understand the return policy and continue to shop with the retailer.
The bottom line: Returns are sometimes necessary. Just make sure you read the fine print, and if you're giving a gift, understand the policy before giving your recipient a gift receipt potentially accompanied by a headache.