Amazon, Walmart, and Target are all taking a new approach to returns by telling customers to keep what they bought, even after issuing refunds

Amazon, Walmart, and Target are all taking a new approach to returns by telling customers to keep what they bought, even after issuing refunds
Walmart Media Relations
  • With more people than ever ordering online, major retailers are offering a new choice to customers for some returns: keeping the refunded merchandise.
  • For small items of relatively low value, it makes less logistical and financial sense for large retailers like Walmart, Amazon, and Target to process the physical return.
  • Representatives for Walmart and Target confirmed as much to the Wall Street Journal, and said the option was offered in limited circumstances where the items in an order were unlikely to be resold after return.

With the holidays over and returns season upon us, some of America's largest retailers are processing refunds while telling customers to keep the unwanted items.

Walmart, Target, and Amazon are all identified as doing as much in a new Wall Street Journal report.

Notably, we're not talking about free TVs and computers - the policy is applied to a select criteria of products that are unlikely to be resold, where the cost of processing the return is equal to or greater than the cost of the product itself.
Advertisement
In short: It's a policy intended for relatively low-cost items, and it's applied to customers with purchase history at a given retailer.

The biggest expense associated with processing returns is the cost of shipping, Locus Robotics chief executive Rick Faulk 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," he said.

Read more: Google once stood for 'Don't be evil.' Insiders describe how it spiraled into a culture of mistrust that helped build a union aiming to keep management in check.
Advertisement

But with the pandemic still keeping most Americans at home, fewer people than ever are venturing to retail locations to return online purchases. In 2020, online returns leapt by 70%, according to return processing firm Narvar.

Given the sharp increase in online sales, it's no surprise that major retailers are reconsidering the expense of processing so many returns that incur shipping costs. Also unsurprising: Customers enjoy keeping items that they didn't have to pay for.
Advertisement

One woman in Philadelphia attempted to return a dog collar to Chewy.com, which told her to donate the collar instead of sending it back - in addition to replacing the item with a correct one.

"I love that," she said.

Got a tip? Contact Business Insider senior correspondent Ben Gilbert via email (bgilbert@businessinsider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.
Advertisement
{{}}