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Return Policy Report: paid returns are on the rise

Americans love to shop. But we also love to change our minds. In fact, in 2022 around 16% of products bought online were returned–that’s $212 billion worth of products per year.

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Return Policy Report: paid returns are on the rise

Summary

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Besides the obvious loss of revenue, the logistical challenges, impacts on sustainability, and risk of return fraud cause some retailers to be less than generous with their return policies.

Unlike in Europe where there are standardized rules, in the U.S. there are no federal laws mandating specific return policies. So, to help give consumers the heads up, we've scrutinized the return policies of 128 of the biggest retailers.

We analyzed everything from return fees, how long you have to return products, how long it takes to receive a refund, and in-store, pick-up, exchange, and holiday return policies to rank American brands in our returns and refunds report.

Key Findings

  • Out of 128 retailers, 43% don't charge for returns, 35.1% didn't disclose their fees, and 21.88% have return fees–with the average fee at $10.40.
  • Considering all factors, such as standard return days, return fees, and in-store and holiday return policies, Aritzia, Verizon Wireless, Uniqlo, Zara and ThredUp have the worst return and refund policies.
  • Chewy.com offers consumers the best return policy: with 365 days to return, without a return fee and a super-quick processing time of four days for a refund (much better than the study average of 12)
  • Verizon Wireless charges $50 per return–the worst return-fee offender, ahead of Aritzia who charge $45.
  • Delayed connection: telecommunication companies Verizon wireless and AT&T wireless take 60 days to send refunds, along with pharmaceutical company Rite Aid
  • Although half (49.4%) of brands typically offer a 30-day return policy, 71.5% of stores extend their return windows during the holiday season

How did we calculate the return policy scores?

To create the study, we researched the standard return days, days it takes to process refunds and return fees in 128 American companies.

To gauge how flexible and accommodating the policies were, we also attributed a “return policy score,” by checking to see how many of the following options each each store offered:

  • In-store return
  • Return pick-up from home
  • Holiday return policy
  • A guaranteed “hiccup-free” returns process

Considering all these metrics, we were able to rank which stores offer consumers the most flexibility when returning products and process refunds the most efficiently.

Brands with the worst return policies

With the second highest return fees ($45) and strict and complex return policies, the worst performer is 2.6 billion-dollar Canadian apparel company Aritzia. A huge 78% of reviewers gave the company a one-star rating on Trustpilot, with multiple reviewers pointing out that for “final sale” products they “do not offer any exchange, store credit or returns - even if there is a gift certificate.” This includes products–as reviewer Hannah claims–with as little as 5% discounts.

brands with the worst return policies



Next on the worst offenders list is Verizon Wireless. Despite being one of the nation's largest wireless providers, and operators of a high-speed 5G network, they lag behind when it comes to waiting times for refunds. Unsatisfied customers can expect to wait for two months to receive their refunds–even after shelling out the highest return fee in the study of $50. While unlimited calling may be on the table, customers understandably don't have unlimited patience when it comes to refunds.

Although the company did score well on the variety of its policies (including options to return in-store, for items to be picked-up, and a generous holiday return policy) reviewers on Trustpilot warned not to buy-in to these promises. In one account, dated August 2023, a reviewer named Cordie said that the company denied that they returned phones–forcing her to prove the return policy to the company herself.

Completing the top three is fashion-giant Uniqlo. The Japanese company is expanding quickly in the U.S. market–and plans to expand existing stores by 10% more. Despite it taking two weeks to receive a refund, offering no return pickup service or holiday return extension, Uniqlo's return policies don't seem to be dampening the brand's rapid growth.

The worst 10 brands for returns and refunds

CompanyCategoryReturn policy scoreHow long does it take to get a refund? (days)Standard days to returnReturn feeOverall refund score
AritziaClothing Retail29365$45.06.33
Verizon WirelessTelecommunications Retail460365$50.06.52
UniqloClothing Retail11490$7.06.53
ZaraClothing Retail114365$4.06.57
ThredUpOnline Retail1490$4.06.60
Forever 21Clothing Retail24590$6.06.64
Saks Fifth AvenueLuxury Department Store21290$10.06.80
Neiman MarcusLuxury Department Store21290$10.06.80
Dillard'sDepartment Store21090$10.06.82
J.CrewClothing Retail214180$7.56.82

Telecommunications companies have the worst return policies

Considering that Verizon Wireless placed second overall, and the two-month wait for a refund at AT&T wireless, telecommunications retailers are the most likely to leave already dissatisfied customers frustrated when returning products.

Although you might think that a higher-quality product warrants a higher-quality service, the research found that luxury department stores are the next-worst culprits when it comes to low-quality returns. Two luxury department stores made our worst 10 list: Saks Fifth Avenue and Neiman Marus. Both charge purchasers $9.50 to return products and leave unhappy customers waiting 12 days to receive a refund.

Placing third is footwear, with all the footwear companies in the list charging for returns. The worst-performing shoe store in the company was DSW (Designer Shoe Warehouse) which charges a steep $8.50 to return their items.

CategoryAvg. return feeHow long does it take to get a refund? (days)Overall refund score
Telecommunications retail$50.00606.52
Luxury department store$9.95126.80
Footwear retail$7.37117.19
Clothing retail$6137.15
Department store$6.3687.63

Four clothing retailers placed in the worst 10 for returns

Fast fashion? Quick mistake. Returning clothes can prove to be a headache-inducing process. Besides Aritzia, household names Uniqlo, Zara, Forever 21 and J Crew all featured in the worst 10.

Four clothing retailers placed in the worst 10 for returns



Forever 21 leaves customers feeling like they're forever waiting for refunds–with an average processing time of 45 days. Like Uniqlo, Zara also offers shoppers limited options when it comes to returns, offering no return-pickup service, no holiday return policy and with no guarantees of a “hiccup-free” return experience.

Which brands offer customers the smoothest returns experience?

We've named and shamed the worst retailers for returns–but which brands are best? Boasting a “simple and worry-free” return policy, Chewy.com lives up to its claim. This retailer offers buyers 365 days to return with no fee, and a quick processing time of four days for a refund. Going beyond the bare minimum in customer service, they offer shoppers the flexibility between online, in-store, or pick-up returns with a holiday return policy too.

Which brands offer customers the smoothest returns experience?



Next is Discount Tire with a 365-day return period, no return fee, and offering in-store returns and holiday returns policy too. In fact, Automotive Service was the best performing sector as a category.

Completing the top three is Target, which offers its customers an accommodating return policy, offering return pick-up services, in-store returns, a holiday return policy, and promising a “hiccup-free” return experience.

Other notable mentions go to Anthropologie and Urban Outfitters, which process refunds in 48 hours–outpacing all brands in the study.

The top 10 brands with the best return and refunds service

CompanyCategoryDays to returnHow long does it take to get a refund? (days)Return feePolicy score (out of 5)Overall refund score
Chewy.comOnline Retail3654$0.039.69
Discount TireAutomotive Service36514$0.029.32
TargetGeneral Merchandise Retail9010$0.049.26
Giant EagleGrocery Retail3655$0.019.08
Qurate RetailHome Furnishing Retail903$0.039.00
Dick's Sporting GoodsSporting Goods Retail905$0.038.99
WalmartGeneral Merchandise Retail9010$0.038.96
The Home DepotHome Improvement Retail9010$0.038.96
Costco WholesaleGeneral Merchandise Retail9010$0.038.96
Kohl'sDepartment Store1809$0.028.89

The best and worst brands to buy gifts from

Not so sure about the novelty socks your great aunt Edna gifted? You're not alone. During the holiday season, returns spike–and recently stores have tightened up their previous generous holiday return policies.

To give your gift recipients options if they would prefer something else, which stores and retailers should you pick (and who should you avoid) when buying gifts this Christmas?

 The table below lists the best and worst performing brands per category, with all the best brands offering a holiday return policy:

CategoryBest return and refund scoreRefund scoreWorst return and refund scoreRefund score
Footwear RetailJourneys7.61DSW7.00
Clothing RetailAmerican Eagle8.73Aritzia6.33
Department StoreKohl's8.89Saks Fifth Avenue and Neiman Marcus6.80
Grocery RetailGiant Eagle9.08Southeastern Grocers7.12
Online RetailChewy.com9.69ThredUp6.60
Home Furnishing RetailQurate Retail9.00Ikea North American Svcs8.71
General Merchandise RetailTarget9.26Costco Wholesale and Walmart8.96

Tips on what to look out for when returning products

Although returns rights may not be standardized across the US, this doesn't mean that consumers are left completely unprotected. Here are the top tips to make the returns process as smooth as possible:

  1. Review return policies: as shown in our study, return policies can differ wildly across different brands. When shopping for gifts, it's worth checking if the brand offers a holiday return policy too.
  2. Keep receipts and packaging: although it may sound obvious, opening products carefully and keeping both the item and packaging in good condition are a must.
  3. Keep track of return shipping: when returning an item in the post, make a note of the shipping and tracking details in case it gets lost or to prove its arrival.
  4. Document everything: customer service webchats don't always save conversations – so make sure to take screenshots in case evidence is needed in disputes down the line.
  5. “Implied Warranty” and “Truth in Advertising” laws: Products should work as advertised for a reasonable amount of time. If a product arrives and doesn't do what it says on the box you will often have the right to a refund or exchange.
  6. Check with consumer protection agencies: If you've followed all the advice and still find yourself getting nowhere it might by time to ask the Federal Trade Commission (FTC) or your state's local consumer protection agencies to step in. There may be local state-specific laws that could protect you too.

Methodology

To create the study, 128 of the largest retailers were chosen as dictated by the National Retail Federation and news reports about changing returns policies.

Of these, 78 explicitly disclosed their return fees. The standard return days, days it takes to process the refund and shipping fees were then analyzed.

The study also generated a policy return score. This was calculated by counting the types of return options on offer, these were:

  • In-store return
  • Return pick-up from home
  • Holiday return policy
  • A guaranteed “hiccup-free” returns process

Each return policy was reviewed to find these metrics which were then weighted in the final score as follows:

  • Standard return days - 20%
  • Standard refund days - 10%
  • Policy return score - 20%
  • Shipping fee (y/n) - 15%
  • Shipping fee - 35%

All data was collected in November 2023.

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