Can the 'Return Anything' Culture Survive?

An increasingly significant component of the essential ecommerce 'contract' between digital marketers and consumers is not just free shipping but free returns. Including shipping costs. In order to remain competitive, all retailers, whether electronic or physical, are forced to follow suit.

From a rational financial perspective, it is not clear how many companies can continue to do this and remain in business. Will Amazon be the only company big enough to afford this approach? JL

Bourree Lam reports in The Atlantic:

Big and small online retailers offer not just free shipping on the front end, but covering the shipping costs on returns. A favorable return policy trumped even attractive prices when it came to online purchasing decisions. Returns will add up to some $260 billion this year. Of the 600 million packages delivered between Thanksgiving and Christmas, about 10 percent, or 62 million, are expected to be returned in January. Buy first, think later.

When I first moved to North America (Canada, in my case), one of the most astonishing things to me in Western retail culture was stores’ generous return policies. Though my parents still believe in buying only the things they really want (I’ve only seen them return defective items), after 20 years I’m fully a part of America’s returns-driven shopping culture: Buy first, think later, and always keep the tag and receipt.
Liberal return policies used to be rare in the middle of the 20th century—something that a few smaller retailers offered as a perk. With time, big-box retailers started to adopt the practice and it spread. Nowadays, many big and small online retailers, in an effort to remain competitive, offer not just free shipping on the front end, but generous return policies too, oftentimes covering the shipping costs on returns. One analysis from Granify, an online-retail consultancy, showed that a favorable return policy trumped even attractive prices when it came to online purchasing decisions.Just like everything else in retail, the impact of returns is much bigger during the holidays. The National Retail Federation estimates that returns will add up to some $260 billion this year. And according to Marketplace, of the 600 million packages delivered between Thanksgiving and Christmas, about 10 percent, or 62 million, are expected to be returned in January.Where do all these items go? Many shoppers might believe that they end up back on shelves, but most of the time they’re passed off to liquidators and resellers—or they’re thrown out, if that’s the cheapest option. The startup Optoro, as The New York Times reports, is handling returns for companies geared toward reselling returned products instead of creating waste. Optoro’s pitch is about reducing waste, but also about helping retailers recoup the cost of returned items by reselling them directly online.

It’s a good thing too, because it’s looking like the reach of return-anything culture will continue to spread. Holiday gifts are now fair game for Marie Kondo-inspired purges. And, perhaps the most extreme example: Target will  provide Target gift cards in exchange for gift cards from 600 other retailers, though customers will only receive 85 percent of the original card’s value.