The Outside View: Returns Are Every Retailer’s Double-Edged Sword

The holiday shopping season means two things to most retailers: a ton of sales, and a host of returns. Many shoppers will load up their carts guilt-free, knowing return perks are now table stakes. I’m talking pre-printed return labels, the option to drop off in-store, free return shipping, and generous return windows. In the last several years, retailers have invested millions into making this annoying errand virtually painless for consumers. In fact, it’s changed how many people shop. Today we order five different sizes of the same jeans, and return the ones that don’t fit. We buy seasonal merchandise and return it after the holidays, no questions asked. We buy a mattress online and schedule a return pickup on the 99th day of use. But behind the curtains, the rising cost of returns is becoming unsustainable. On top of labor costs to handle legitimate returns, revenue loss from fraudulent or un-restockable returns are sky-high. Last year, experts estimate retailers took back an overall value of $369 billion in returned merchandise, $24 billion of which was estimated to be fraudulent. Naturally, retailers are bracing themselves for the return avalanche this shopping season. Both Asos and L.L. Bean have recently tightened their lenient return policies. Others,

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