It’s one of the most under-publicized policies of some of the biggest U.S. retailers: Sometimes they give customers full refunds and let them keep unwanted items too.
Returnless refunds are a tool that more retailers are using to keep online shoppers happy and to reduce shipping fees, processing time and other ballooning costs from returned products.
Companies such as Amazon, Walmart and Target have decided some items are not worth the cost or hassle of getting back. Think a $20 T-shirt that might cost $30 in shipping and handling to recover. There are also single-use items, such as a package of plastic straws, that might be difficult to resell or medicines that could be unsafe to market again.
Analysts say the companies offering returnless refunds do it somewhat sporadically, typically reserving the option for low-cost objects or ones with limited resale value. But some online shoppers said they’ve also been allowed to keep pricier products.
While the retail practice of letting customers keep merchandise and get their money back is not exactly a trade secret, the way it works is shrouded in mystery. Companies are not keen to publicize the circumstances in which they issue returnless refunds due to concerns over the potential for return fraud.
Even if brands don’t give details on such policies on websites, returnless refunds are expanding in at least some retail corners.
Amazon, which industry experts say has engaged in the practice for years, announced in August that it would extend the option to the third-party sellers who drive most of the sales on the e-commerce giant’s platform. Under the program, sellers who use the company’s fulfillment services in the U.S. could choose to offer customers a refund for purchases under $75 along with no obligation to return what they ordered.
Amazon did not immediately respond to questions about how the program works. But publicly, it has pitched returnless refunds more directly to international sellers and those who offer cheaper goods.
In January, Walmart gave a similar option to merchants who sell products on its growing online marketplace, leaving it up to sellers to set price limits and determine if or how they want to participate.
China-founded e-commerce companies Shein and Temu say they also offer returnless refunds on a small number of orders, as does Target, the online shopping site Overstock and pet products e-tailer Chewy, which some customer said had encouraged them to donate unwanted items to local animal shelters.
Overall, retailers and brands tend to be careful about how often they let customers keep items for free. Many of them are deploying algorithms to determine who should be given the option.
To make the decision, the algorithms assess multiple factors, including the extent to which a shopper should be trusted based on prior purchasing — and returning — patterns, shipping costs and the demand for the product in the customer’s hands, according to Sender Shamiss, CEO of goTRG, a reverse logistics company that works with retailers like Walmart.
Last year, U.S. consumers returned $743 billion worth of merchandise, or 14.5% of the products they purchased, according to the National Retail Federation.