It’s Andy here today. Ann is over in OurLittleCorner trying to convince us that glass can be soft.
My previous blog was about free shipping so I feel morally obligated to follow up with the flip side of the e-commerce coin: free returns. While free shipping may nudge us to the digital shopping cart, it’s free returns that often seals the deal. At least that’s the case in our household. For example, a couple of evenings ago I told Ann that I was thinking about ordering some cycling shoes online and before I had finished the sentence she said, “Be sure they offer free returns.”
This got me thinking about a NewYorker article by David Owen I read a while back: “What Happens to All the Stuff We Return?.” Beyond shedding light on the booming industry based on the rising flood of returned stuff ( what’s called “the reverse supply chain”), Owen explains how free returns came to be considered something akin to an unalienable right.
The idea of free returns was the brainchild of James Cash, who in 1913 founded the J.C. Penney retail chain with the innovative policy of “allowing customers to return anything, no questions asked.” It’s noteworthy that Sam Walton, who worked at a Penney’s store prior to launching his Walmart chain, adopted a similar return policy which is still in effect.
It was nearly a century later when Amazon normalized free returns for online shoppers and Zappos kicked it up a few notches by offering free returns for up to a year and even encouraging customers to order items in multiple styles and sizes. [As an aside, Amazon started a similar shoes-and-accessories site, called Endless, but eventually gave up trying to compete and bought Zappos in 2009 for $1.2 billion].
However, it appears that the golden age of on-line free returns has peaked. A couple of years agoThe Atlantic published an article entitled “The Free Returns Party is Over.” The gist of the article is that while the free return policy had been been wildly successful in luring millions of consumers, it turned out to be a “giant boondoggle, logistically and financially” and on-line retailers have begun looking for an offramp.
From among the numerous web sites that offer explanations for the demise of the free return boom I found that a blog posted by Carriyo (a company that coordinates the shipping logistics for large online retail businesses) was particularly informative (and disturbing). It suggests that the “collapse” of free return policies is result of three interrelated factors.
Two of these factors are not surprising. First, the cost of the “reverse logistics”of returns has led to mind-boggling annual losses for retailers. And second, recent tariffs have increased financial strain .
It’s the third factor, return fraud, that I found the most disturbing. Fraudulent returns have accounted for about $100 billion in losses for retailers, which is a huge chunk of change. However, to me the issue of return fraud is much more than about economics. It raises questions about the moral integrity of those of us who have returned goods on line and makes me wonder at what point does a savvy shopper step over the line to become too savvy of a shopper?
This is not just idle thought; research findings show that:
Close to two-thirds of consumers admit to participating in at least one costly return behavior — from wardrobing (buying items with the intent to use and return them) to bracketing (ordering multiple sizes and returning the rest). Among consumers who wardrobed, 30% say they do it weekly. Among bracketers, 25% do it at least once a week.
Although these estimates may sound exaggerated they’re consistent with what I found across sources. It’s hard not to be impressed with the variety and ingenuity of return fraudsters — sending back empty boxes, putting broken or fake items in boxes that weigh as much as the original product (one company reported receiving a bible in lieu of the original product), returning stolen merchandise, swapping products for cheaper versions.
According to the National Retail Federation the upshot of the “unsustainable costs” of free return policies has forced 72% of retailers to introduce charges for at least some returns (averaging about $9.00 per return).
“What was once unthinkable — asking customers to pay for the privilege of sending something back — has become standard operating procedure.”
In one sense it’s tempting to see losing the “privilege” of free returns from a Pogo-esque stance — We have met the “enemy” only to realize that rather than greedy retailers, it is us, the consumers— for being too savvy. On the other hand, to frame free returns as a perceived “privilege” is misleading. By dangling the free-returns carrot in front of us, retailers drew in millions of customers (and grossed over $1.17 trillion in 2024 alone) and then turned around and justified the need to impose return fees by accusing their customers of abusing the system. This sounds a whole lot like “blaming the victim.” I suppose that like many things the truth lies somewhere between.
Ann’s admonition to find a vendor with free returns is what got me started on this blog, so I’ll close by reporting that I did find an on-line site with the brand and size of cycling shoe I wanted. But a free return option was not part of the deal. They charge a $10 return-shipping fee.
I thought about asking if they would knock a dollar off the return fee to meet the $9 national average but decided it wasn’t worth the hassle. Anyway, the shoes were marked down 15 percent for a Labor Day sale, so I hit the “buy” button (for one pair) on the digital shopping cart. While not pleased that I would have to pay a fee should I decide to return the shoes, I did come away feeling somewhat self-righteous for overcoming the bracketing temptation (admittedly with a little help from that $10-a-pop return policy).
Let’s hope the shoes fit.
I’m seriously impressed you got 10 years out of your cycling shoes! Fun and informative article! Thank you, Ramona