The busy holiday shopping season is underway, and according to the National Retail Federation, spending is expected to reach a new record. But before purchasing an item, you need to pay more attention to return policies — because retailers are making significant changes that could impact you.
"Returns kind of help minimize that post-purchase regret that a customer might have," Lauren Beitelspacher, a professor in the Marketing Division at Babson College.
A national study found that most consumers — 76% — say free returns is a key factor in deciding where to shop.
"The problem is, because we shop online so much more now, there are fewer factors in place to kind of help us figure out how much we really like or don't like," Beitelspacher said. "There's more opportunity for post-purchase regret when that product comes to us … and that costs retailers a lot of money."
This year, retailers estimate that nearly 17% of their annual sales will be returned.
"It's an expense not to have a returns policy, and it's an expense to have a robust returns policy," said Beitelspacher.
So, what does that mean for you? The majority of retailers surveyed now say they are reworking their return policies in hopes to drive better sales and keep customer loyalty.
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"Retailers have to really understand their customer and what the customer's willing to accept and find the right level that maintains their margin as a retailer, but then also doesn't discourage the customer from buying from them," explained Beitelspacher.
Shoppers can expect to see a variety of return options where there is an incentive to return to the store and instead of shipping the item back.
"If we return in the store, then the retailer can just put it immediately back on the sales floor instead of having to go through the shipping process," said Beitelspacher. "There might be an incentive to return it within a quicker time period of 10 days instead of 15 days or 30 days."
"This free for all of 'full return, full return, we'll absorb the shipping costs,' those days are gone," she added. "I mean, that's very expensive for a retailer. And if a retailer is going to offer that, then they're going to have to increase their prices."
One more thing you need to know — in Massachusetts, there are guidelines that retailers must follow to protect consumers when it comes to returns.
Business must clearly display their return policy somewhere in the store before you buy something. For example, a store might have a policy of "all sales final" or "merchandise credit only." Stores must accept returns of defective merchandise and offer a repair, replacement or refund. If you get credit for a return, you have at least five years to use it.
