Unwanted Goods? Retailers Turn to "Keep-It" Policies to Curb Rising Return Costs

A number of companies are advising customers not to bother returning items for a refund due to the high expense of processing, repackaging, and trying to resell stuff. Rather, they are stating that you may retain it and still receive a refund.

If you got a cheap yoga mat or kitchen spatula for a few dollars from a big-name online store and it wasn't what you anticipated, for instance, they may refund your money without making the effort to pick up the item.

GoTRG, a returns logistics provider, found that 59% of businesses indicated they provide "keep it" services for returns that aren't worth collecting.

Of those merchants, 27% thought their keep-it policy applied to products up to $20. In fact, the costs incurred by companies in handling product returns might occasionally outweigh the item's market worth.

Sender Shamiss, CEO of goTRG, explained that the cost of shipping returns can be substantial, ranging from 75% to 100% or more of the value of the unit. Shamiss highlighted the significant impact of shipping costs on the overall value of returned goods, leading companies to assess whether the cost of taking back a product exceeds its value. In such cases, companies may opt to allow customers to keep the items.

Among the major online shops that occasionally provide "returnless refunds" is Amazon.com.

One of the expenses linked to receiving returns is closely examining the products to see if they are resalable as new. Occasionally, items that aren't fit for sale are given to charitable organizations.

Furthermore, goTRG reports that Chewy.com, a pet food firm, and Wayfair, a retailer of furniture and home décor, have comparable rules in place. From an economic perspective, experts say, keep-it regulations make sense for businesses that transport large or heavy products, which are more expensive to ship.

According to Shamiss of goTRG, the majority of businesses who provide these policies employ advanced algorithms to assess if a client is acting honorably and is likely to remain a loyal customer in an effort to discourage them from using keep-it choices.

Amazon takes stringent precautions to prevent users from abusing its keep-it policy, such as when they just don't want to pay for inexpensive things.

Retailers also usually avoid promoting returnless refund policies so as not to incite careless customer conduct.

Insights from goTRG CEO and Retail Executives

According to 500 retail executives last year, 26% of businesses have these kinds of standards, according to Sender Shamiss, CEO of goTRG, a company that works with Walmart. The number of businesses participating in the poll from the previous year was not broken out.

Return-free policies for certain online purchases are becoming increasingly popular among merchants as they utilize technology to save expenses, according to Shamiss, who declined to identify the specific firms that employ them. Retailers are concerned that customers may misuse the policies, which is why they "do not want that information out there," he added.