If you decide you don't want something after you buy it, you can return it to the store for a refund or exchange.
The rise of online shopping has thrown a wrench into this decades-old retail practice, increasing both the percentage of purchases that need to be returned as well as the cost of dealing with those returns.
According to research from Appriss Retail, the rate of returns on US shoppers' $4 trillion worth of merchandise in 2020 was just over 10%.
Shoppers have a lot of reasons for buying stuff they aren't sure they'll keep, from taking a closer look at colors, materials, and construction, to "bracketing" sizes to find the right fit.
Customers trying out different options in a store has negligible costs for a retailer, but providing that experience at home begins to introduce some significant expenses, especially at a time when supply chains are being stretched to their breaking points.
The CEO of a returns-automation firm told The Wall Street Journal that returns can cost a company between $10 and $20 per item. Shipping charges make up 15% to 20% of the expense.
The cost of returns can affect the value of a product to the seller, so they may just tell the customer to keep it. Several major brands have done that.
"When companies tell customers to keep a product, that's the most expensive way of handling returns," said the Reverse Logistics Association's research manager.
As shipping and warehousing rates keep going up, there is not much of a choice at the moment, but it will likely change in the future.
When an item is returned, it is subjected to a process called "disposition," which is the individual inspection of a returned item to determine whether it should be recycled, refurbished, or resold.
The cost of returns can be a serious problem for a company's profitability.
In recent earnings calls, companies like Target and Home Depot have talked about the growing role of their physical stores in fulfilling online orders, and Roberson agreed that physical stores could begin to play a larger role in handling returns.
Just as companies like Macy's subtly tell customers to absorb the last-mile expense with free shipping to a nearby store, they could begin requiring shoppers to bring their returns there too.
"Retailers are not going to keep this up," he said. They simply can't afford it.
