With the holidays fast approaching, all eyes are fixating on Black Friday and the chance for record setting revenue. The sales themselves are only half the equation; the inevitable returns that follow those Black Friday deals are top of mind for retailers too. Every year, millions of items are sent back to retailers, and they must deal with restocks that burden their supply chain. Most retailers offer money back guarantees on all purchases and even extended return windows for holiday purchases. With so many returns every year, retailers must watch as their projected Black Friday profits dwindle. It’s already been a tight year and retailers can’t afford to watch consumers send back a record number of products. This could be the first year that we see companies actively working to dissuade and, in some cases, prevent the normal influx of returns.

Retailers need a strong Black Friday this year; however, inflation is a sticking point for consumers, and they have often been unwilling to open their wallets for most of the year. The deep discounts that usually strike in November will be enticing and should convince most consumers to start spending. The deals will start early again this year in October and the returns will soon follow. With this being such a crucial year, retailers are re-evaluating and altering longstanding return policies that cut into holiday profits. Most major retailers have offered in-store return policy for decades and while these do cut into profits, they are also a hassle for customers and are more difficult to exploit. However, these policies extend to online items and are often more forgiving and require much less effort on behalf of the consumers. Even Amazon, the leader in digital retail, has a simple return policy that allows customers to return items without even leaving their house. These consumer-friendly policies were an important part of bolstering online retail by limiting buyer risk, yet convincing consumers of the benefits of shopping online is unnecessary in the modern market. Consumers are buying more items digitally than ever before and these return policies are easy to exploit at the company’s expense.

Retailers have already started making changes that will affect how likely consumers will be to return items. Amazon has quietly changed their policy and will now charge customers who return items to UPS stores when a drop-off center is closer. Other retailers have shortened return windows or required customers to bring the items to a physical store. More drastic changes have come in the form of specialty items being non-refundable and restocking fees that charge consumers a percentage of their purchase price. These changes can help retailers save on costs and deter shoppers who overbuy or add items to exploit free shipping. The downside is that consumers have already pushed back on the changes and the voices of dissent will only grow louder when the holiday season arrives. While some consumers won’t notice the change until after they have made their purchases, others will balk and could move on to other retailers with friendlier policies. The balance between reducing the costs of returns and the chance of alienating consumers is a tightrope that all retailers will be walking over the next few months.

Change is inevitable and retailers need things to change in a positive direction this November. Altering return policies is a gamble that could usher in industry wide changes or leave some retailers out in the cold. CSG will be monitoring the fast-approaching Black Friday shopping season and how these return policy changes will affect the spike in sales that we usually see.