Amazon, Walmart, Target allowing some customers to keep refunded return items

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Some retail heavyweights, including Amazon, Walmart and Target, are allowing customers to not only process refunds seamlessly online, but are also allowing customers to just keep the returned items.

As the COVID-19 pandemic continues, more and more retailers are trying to think of ways to implement contactless shopping, as well as contactless returns.

Amazon had popularized the notion that some items are just not worth returning after doling out refunds without requiring items to be returned, known as their "returnless refunds" policy, according to the Wall Street Journal.

With the cost of shipping and handling to get returns back to the retailer, it only made sense to let consumers keep the products, or better yet, donate them.

"A Target Corp. spokeswoman said the retailer gives customers refunds and encourages them to donate or keep the item in a small number of cases in which the company deems that option is easier than returning the purchase," according to the Journal.

Retailers with a heavy online presence are getting innovative and using artificial intelligence to determine whether or not it is financially sound to have the refunded item shipped back or to just let the consumers keep it, the Journal reported.

"A Walmart spokeswoman said the ‘keep it’ option is designed for merchandise it doesn’t plan to resell and is determined by customers’ purchase history, the value of the products and the cost of processing the returns," according to the Journal.

Processing an online return can sometimes amount to $10-$20 per item not including shipping fees, Rick Faulk, chief executive of Locus Robotics, which uses robots to help automate returns, told the Journal.

"Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost," Faulk said.

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Amid the ongoing COVID-19 pandemic, retailers are attempting to do their part to discourage the public from going out and about, and that includes having them leave their homes to ship back a return.

In 2020, consumers returned a whopping $428 billion worth of merchandise, according to a report by the National Retail Federation (NRF).

"While the total rate of returns is in line with recent years, online returns more than doubled in 2020 from 2019 and are a major driver of the overall growth of returns. In 2020, ecommerce accounted for $565 billion or 14 percent of total U.S. retail sales. Approximately $102 billion of merchandise purchased online was returned, with $7.7 billion (7.5 percent) labeled as fraudulent," the NRF reported.

The hundreds of billions of dollars in returns over the past year accounted for approximately 10.6% of total U.S. retail sales, the retail trade group stated.

"Last year, we saw an increase in returns of online purchases as the pandemic forced more consumers to shop online," said Mark Mathews, NRF’s vice president of research development and industry analysis. "Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience."