Online shopping>: So convenient! So cheap! Returning those gifts to the cybermall: So expensive! Such a hassle! While there's not much online retailers can do about the required trip to the post office to send back a dud, they are starting to sweeten their return policies, extending the windows and picking up the tab.
A third of all retailers have put a special, more flexible return policy in place for the holidays, according to the National Retail Federation, and online retailers are at the forefront of the trend, says Wayne Hood, a senior research analyst for BMO Capital Markets. Typical enhancements include extending return periods, offering free return shipping, or both. This is yet another bid for customers: Because finding the lowest price is so easy online, stores have had to find other ways to compete. And in categories like shoes, or clothing, where it can be hard to gauge fit, a generous return policy also brings online retailers more in line with local merchants, where returning almost anything requires only a drive to the store.
These holiday return promotions reflect a general loosening of online return policies. Ever since shoe retailer Zappos.com launched in 1999 and made free returns a cornerstone of its services, online stores have been following suit, often starting with a test run over the holidays. Amazon (AMZN),
But even as online returns get easier and cheaper, logistically speaking, stores are making other changes to their policies that can make returns tougher. "They're giving with the right hand and taking away with the left," says Edgar Dworsky, the founder of ConsumerWorld.org, which that annually tracks changes in return policies. Although Toys "R" Us recently tripled its online return deadline for most items to 90 days from the date of purchase, the company also banned returns on some opened items, including electronics and video games. (Previously, such items had carried a restocking fee of up to 15%, Dworsky says.) A Toys "R" Us spokeswoman said the changes were made to align in-store and online policies.
The trend is also growing slowly, in contrast with the recent surge of offers for free shipping on all orders, for example, says Luke Knowles, the founder of free-shipping-focused site FreeShipping.org. Return policies are generally less visible, so they're harder to promote. There's also a potential cost in making returns easier, with sites losing money to cover return shipping fees and eat restocking charges. And what retailer wants to admit you might not like its product? It takes a major player in a given category to push a trend, Knowles says: If Zappos.com hadn't made such a big deal out of its free shipping and free returns, we'd probably all still be paying to send back ill-fitting shoes bought on an impulse, wherever we bought them.