Shoppers Fight Back as Retailers Crack Down on Returns

Shoppers are pushing back. They are reading the fine print of return policies and product reviews that they hope will help them divine the quality and fit of potential purchases. Some have stopped buying altogether from retailers that charge for returns.

So far, the tug of war doesn’t appear to be denting sales, which rose 3.4% on Black Friday compared with last year, according to Mastercard SpendingPulse, which tracks purchases in stores and online. Online sales rose 14.6%, while in-store sales grew 0.7%. The figures exclude sales of automobiles and gasoline.

The season has gotten off to a strong start, although there are still several important weeks in December that will determine the full extent of consumers’ willingness to spend. The National Retail Federation expects sales in November and December to rise between 2.5% and 3.5%, compared with the same periods last year.

Retailers say the stricter policies are necessary because returns and return fraud are eating into their profits. Shoppers say inconsistency in sizing makes it difficult to buy online without ordering multiple sizes. And physical stores are often out of stock on the items they want to buy. 

Priya Rednam-Waldo, a therapist and life coach, said she stopped shopping online at Saks Fifth Avenue and Neiman Marcus after they added restrictions. In April, Saks began charging $9.95 for returns by mail, while Neiman charges a similar fee for clearance items and those returned after 15 days.

“If I can find the time to go to a store, I’ll do that,” said Rednam-Waldo, 40, who lives in Detroit. “But I won’t gamble anymore with online purchases because of the fees.”

More than two-thirds of consumers who are aware of stricter return policies say those rules deter them from making purchases, up from 59% in 2023, according to a survey of 1,000 U.S. adults in July by Blue Yonder, a supply-chain management company.

Retailers point out that shoppers can usually return online purchases at physical stores free. Most retailers offer extended return windows during the holidays and exempt top-tier loyalty members from fees.

Online return rates are up about 15% compared with 2019, according to Narvar, which manages returns for retailers. The number of retailers on Narvar’s platform that charge return shipping fees has increased 20% compared with the same time a year ago, according to David Morin, Narvar’s vice president of customer strategy.

Return fraud is also on the rise. In 2023, nearly 14% of retail returns were fraudulent, up from 10.4% a year earlier, according to the National Retail Federation and Appriss Retail.

Raimonds Lauzums, who owns a toy store in Belgium, Wis., said he received a barrage of angry emails from customers when he tried charging $8 for returns by mail. The 28-year-old reverted to offering free returns for online orders, even though some customers have scammed him. One ordered a $1,000 Lego set and returned an empty box. Another returned a box of cereal in place of a different Lego set. 

“We realized we had to offer free returns and just take the loss on some of these items,” he said.

Retailers pay $21 to $46 to process a single return, according to consulting firm McKinsey. Some retailers are turning to technology to help solve that problem. 

H&M Group is a minority investor in Stockholm-based eComID, which uses artificial intelligence to generate personalized shipping and return fees. The fewer items someone returns in a year to a particular brand, the lower the personalized fee. 

Oscar Rundqvist, eComID’s co-founder and chief executive, said the 15 brands using his technology, including H&M’s & Other Stories brand, have had a 35% reduction in bracketing, a term for the common practice of buying multiple sizes and returning those that don’t fit. The brands’ overall return rates have decreased slightly and their net revenue has increased because the brands are spending less to process returns, he said.

Tote, a fitting-room booking platform, is offering an alternative to bracketing: appointment shopping. Shoppers browsing a brand’s website can reserve items for a specified day and time to try on at a physical store. The store will have the items waiting in a fitting room when the customer arrives. The service is free to shoppers, and Tote collects a fee from the 48 brands currently using its system.

“The goal is to get customers into the store,” said Mario Ranieri, the director of retail for the clothing brand Billy Reid, which has been using the reservation system at its 18 stores for about four months. Billy Reid customers spend about $200 more per purchase in a store than they do online, he said. And the return rate of in-store purchases is lower. “There is no doubt that when you come in and try it on, you are more likely to keep it,” he said.

Saks is conducting more thorough inspections of returned goods to combat return fraud. But the crackdown has led to mistakes—and unhappy customers. 

Brittany O’Brien, a 31-year-old content creator, was initially denied a refund for a $695 Ramy Brook dress that she shipped back to the luxury department store chain. Saks sent the dress back to her, saying it couldn’t issue a refund because the dress had deodorant stains. 

O’Brien, who lives in Hoboken, N.J., took photos of the dress, which didn’t appear to have any stains, and posted them on TikTok. The video went viral with more than 3,000 comments. O’Brien filed a complaint with the Better Business Bureau and eventually received a refund.

Saks denied Theresa Melcher a refund for a $3,625 Jenny Packham dress, which Melcher said she had tried on only briefly in her Birdsboro, Pa., home.

“It makes me hesitate to buy online, but I have to drive 45 minutes to the nearest mall,” said Melcher, a college administrator. “When I get there, the thing I want is usually out of stock.”

A Saks spokeswoman said the company incorrectly rejects less than 1% of returned items. The company is working to improve its processes to reduce mistakes, she said.

Write to Suzanne Kapner at suzanne.kapner@wsj.com