Retailers pay more to process online item returns


Many Americans are just starting to return holiday gifts.

For gifts ordered online, returns can be a problem, not only for consumers, but also for retailers.

The Optoro returns processor reports that it costs retailers $ 33 to process a returned $ 50 item. And while it can sometimes be free to return an item purchased online, that is not necessarily true.

Retail experts say customers have always paid for returns, and now that stores are paying more, those costs can be passed on to consumers.

“It’s about making a profit, which is the arithmetic difference between what you buy goods on – a market – for a customer, and what a customer is willing to pay,” said Mark Cohen, director of retail studies at Columbia University. “The difference is the gross margin, and the gross margin has to cover the discounts – handling, shortage and, of course, returns and freight.”

Cohen says customers are seeing a difference in prices and policies. Retailers have quietly stepped up their return policies, which means customers should take a closer look at items before purchasing them online.

“Retailers are going to start putting a 30-day limit on the time to return things,” Cohen said. “There are already retailers that are charging restocking fees on things like electronics to offset the heroic cost of processing returns.”

More and more people have shopped during this recent holiday season, so retailers are expecting a high number of returns.


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