The era of easy returns is over

The days of no-questioned-asked returns are numbered, as retailers crack down on one of their biggest profit suckers in a worsening economic climate. 

Driving the news: Across North America, merchants—especially those with online stores—are shortening their return windows (Sephora), adding return fees (Uniqlo) and, offering discounts to discourage returns (Amazon), per The Wall Street Journal.   

  • H&M Canada charges a $4.99 shipping fee for returns. At Urban Outfitters, a return will set you back $5. Footlocker Canada charges $6.99 for all mailed returns.

Why it’s happening: In recent months, huge retailers, including Lululemon, Walmart, Nike, and others, have reported they have too much inventory, which costs them a lot of money to store. Add high return rates into the mix, and retailers are looking at a scary financial picture.

  • Some retailers are grappling with return rates of ~20% of total items sold. If you’ve ever bought a shirt in three colours so you can pick your favourite, you’ll get why. 

Fun fact: In Canada, businesses aren’t actually legally obligated to accept returns unless a purchase you’ve made is defective, but many do it anyways to help keep customers happy. 

Why it matters: Shoppers are already dialling back on spending as inflation and high borrowing rates cut into our fun money. With new crackdowns on returns, we’ll probably start thinking three times as hard about whether we really need that new summer outfit.—SB