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'Serial returners': How COVID and free shipping made over-buying the new norm

Paul Roberts, The Seattle Times on

Published in Business News

Drop-off locations earn a small handling fee from shippers — Sip and Ship, for example, gets 50 cents for each UPS and FedEx return, but nothing for USPS. Yet, while that rarely covers the extra labor or insurance, many are loathe to charge extra for a service many consumers now seem to regard as a constitutional right.

"Most people have gotten used to it, but it's incredible how many people get very, very mad about the dollar," Sabrina Rinderle, proprietor of Queen Anne Dispatch, said about a fee the mail services/gift shop started charging for USPS packages.

The biggest pushback, paradoxically, may come from retailers. Returns are expensive: for example, the cost of sending back a $50 item this year could average $33, up 11.9% versus 2020, according to an estimate by Optoro, an expert in so-called reverse logistics.

That's partly because many returns are marked down and sold on secondary markets; but it also reflects the inefficiencies of trying to push products back up the supply chain: E-commerce returns typically take more labor and space than do the original e-commerce shipments, according to CBRE.

"The supply chain, in general, wasn't built to go backwards," says John Morris, who runs CBRE's logistics service line.

That's one reason some retailers simply write off lower-value returns. "This year, for the first time ... I called for the return label and they said, 'Keep it,' " said Amy Doerzbacher, who was dropping off a return at Sip and Ship.

 

Other returns are simply thrown out: roughly 2.9 million tons of returns went into landfills in 2020, according to Optoro, and that number is expected to grow this year, adds CRBE's Morris.

Some industry experts think retailers will have little choice but to try to tamp down the send-it-back business model — for example, by encouraging customers to bring e-commerce returns to retailers' brick-and-mortar locations. Some UPS Store officials say some big retailers are already selectively raising return fees for "serial returners."

Some smaller retailers, meanwhile, are taking a more proactive approach — by trying to sell things customers won't want to send back in the first place, but also by carefully setting expectations about returns.

If a product doesn't fit, "we'll work with you," said Devynn Patterson at Marakesh Leather, a Seattle company whose online sales jumped from 5% to around 35% of its total during the pandemic. "But we're not in a position where we can just allow people to wear merch and decide they don't like it and return it."

"We do as much as we can to stay competitive," Patterson added. But "we try to make it clear that, 'Hey, we're a small family business.' "

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