Planning to return that holiday gift? You might be charged a fee.
Shopping for the holidays could turn into a pricey proposition if you plan to return some of those presents as more major retailers are charging fees to ship them back.
By the time 2024 wraps up, U.S. consumers will have returned nearly $900 billion in goods, according to a new report by the National Retail Federation and Happy Returns, a return management company.
The explosion of online shopping during and after the pandemic has led to increased returns, according to David Morin, vice president of customer strategy with the logistics company Narvar.
"There are higher return rates on e-commerce purchases because of the lack of ability for someone to try something on before they get it, to feel it, to touch it," Morin told CBS News Philadelphia.
As returns rise, retailers face increasing costs to process them. Narvar estimates a $100 item costs a retailer roughly $32 to get back and re-sell. Transportation is one of the biggest expenses.
Now more retailers are charging fees to customers who opt to ship their returns.
"We are seeing about 20 to 25% more retailers charge for returns this year than last year," Morin said. "It is a way for retailers to recoup some of the cost of doing returns."
A whopping 81% of retailers rolled out stricter return policies in 2023, according to Happy Returns, including shipping fees, restocking fees and shorter return windows.
Queen Stewart, a South Jersey mother of two, said she does most of her shopping online these days. She said she understands why retailers are tightening up their policies.
"I get where they're coming from, there's a cost for the product, to ship the product, to restock the product," Stewart said. "If this is happening over and over and over again, it's cutting into the bottom line."
But there is one simple way to mostly avoid these new fees: return the item to a physical store location. In the case of Amazon, the online giant accepts returns for free if you drop them off at Whole Foods or Kohl's. In some cases, the retailer also accepts returns at UPS locations.
On the flip side, some retailers are trying to get a handle on ballooning return costs by simply allowing customers to keep the unwanted item while still issuing a full refund.
Amazon, Walmart and Target have quietly and sporadically employed a return-less refund policy on some low-priced items deemed not worth the cost or hassle of getting back, like a $20 T-shirt that could cost $30 in shipping and handling to recover, the Associated Press reports.