If you’ve bought something from Amazon, decided you didn’t want or need it, and tried to return it only to have the company essentially say, “Never mind – just keep it, we’ll send you a refund,” you were probably stunned. Amazon has quietly done this for a few years, often with inexpensive items (like napkin rings, paperback books, and hats) and bulky items (like an electric lawn mower).
But as the COVID-19 pandemic continued, supply chains fell apart, and the price of fuel kept going up, other retailers have joined in on letting customers keep their unwanted items instead of returning them. How much? Roughly 10% to 16% in the past quarter, according to Joel Beal, the CEO of Alloy.ai, a retail data software platform.
Reportedly, that chaotic mix has retailers like Target, American Eagle Outfitters, and The Gap considering the unthinkable: Instead of returning your unwanted purchases, just keep them. They simply have tons of stuff in their inventory, and it’s costing them tons of money to store it.
Joe Ayyoub, chief revenue officer of Search.io, told ConsumerAffairs that retailers hurried to order an excess of inventory due to supply chain fears – but that move fell flat on its face.
“This overstock of inventory ended up being too much for stores to process/store sell. There was an expectation that retailers would be able to sell off these supplies during Memorial Day Sales but this did not happen at the volume they had hoped for,” Ayyoub said. “Retailers are now in a dire situation, and must get rid of extra inventory due to the seasonality of products (ex: Having winter clothing in stock but no room for summer clothing).”
Too little inventory space isn’t the only issue
ConsumerAffairs reached out to retail experts who could help explain this oddity a bit further. One thing we wanted to find out is why there's no real rhyme or reason to what's allowed to be kept by a customer – for example, toys and toiletry items.
“Some items are just safer not to have them returned – things that you need to confirm are not opened and still sanitary,” said Nell Alverson, director of channel marketing at ScanSource.
When it comes to heavier, bulkier items, Marc Werner, the founder of GhostBed, a mattress manufacturer, said that returning bulky items – like a mattress in a box – can be tricky for a customer. He also said his company wants to make sure one of their mattresses doesn’t end up in a landfill, and it’s better for both sides if the company works with the customer to give it a proper new home instead.
“So it's case by case but you have to have some rules to not have a free for all for ‘just keep it’,” Werner told ConsumerAffairs.
This won’t last forever – and whatever you do, don’t abuse the privilege
Consumers shouldn’t expect this gesture to last forever. “Even though businesses want to do whatever it takes to meet consumers' demands and turn a profit, this may prove to be a band-aid solution,” said David Food, the head of supply chain at Board International, sharing that companies are working hard to right-size the situation.
“We are currently stuck in a world struggling to catch up, and until we create the capacity to do that through intelligent planning, we will continue to see trends where they are most cost-effective and convenient to limit returns."
However, consumers should think twice about making returns a habit. “The trick is that brands must be careful not to get gamed by fraudulent customers. So the best brands will add intelligence, e.g. customer ratings, or limit this benefit to certain customers (e.g. VIPs) or products (e.g. low margin or heavy items that are expensive to ship),” Aaron Schwartz, president at the returns platform Loop, told ConsumerAffairs.
What happens to consumers who a retailer thinks are gaming the system? Take Amazon, for instance, whose return policy is generous, allowing most items to be returned within 30 days. "However, the e-commerce retailer does monitor returns and refunds to ensure customer and merchant satisfaction,” Algrim.co says in its Amazon returns guide.
“If Amazon suspects suspicious return activity on your account, you will receive an email reminding you of the store’s return policies" as a warning. But if you go too far, consider yourself warned: Amazon has been known to ban customers.