Retailers Surrender To Unprecedented Costs On Online Returns

Returning unwanted gifts this holiday season is becoming so expensive for retailers that they just might let customers keep the products -- and issue refunds anyway. Axios reports: The cost of online returns is soaring, contributing to increased prices, product shortages and supply chain stress. Returning a $50 item is expected to cost an average of $33, up 59% from 2020, according to Optoro, a returns processor. Worker shortages and supply chain problems are taking a toll, Optoro CEO Tobin Moore tells Axios. About three in 10 online purchases are returned, according to CBRE Supply Chain. Retailers are expected to pass on the cost of returns in the form of higher prices. "The consumer pays the price of a free return,â Columbia Business School retail studies professor Mark Cohen told Today. Some retailers, namely Amazon, sometimes tell returners to keep it. It would cost them too much to process a return, Moore says. The challenge for online retailers is to process returns quickly and get the goods back onto their virtual shelves, minimizing depreciation. "The faster you can get a good back to stock, the more you can avoid markdowns," Moore says.

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