Returning Holiday Gifts May Carry Added Fees, More Conditions This Year

Returning gifts is practically a holiday tradition, but consumers may find this year that there’s a catch, and it has a dollar sign attached to it.

Macy’s, Kohl’s, JCPenney and Dillard’s department stores are among a growing number of retailers nationwide charging a fee on certain returns to cut down on the overall volume of returns, which cost the retail industry more than $100 billion annually.

Nearly three-fourths (72 percent) of merchants surveyed by the National Retail Federation and Happy Returns, a UPS company, said they had started charging for at least one return option in the last 12 months. That’s up from 66 percent in 2024.

Total returns for the retail industry this year are projected to reach $849.9 billion. That includes about 19.3 percent of online sales.

The stricter policies to cut the volume of returns, encourage exchanges and reduce fraud come at a cost to merchants, too: customer loyalty.

While the policies had positive effects such as lowering return volumes (53 percent), increasing exchange rates (52 percent) and curbing fraud (42 percent), customer complaints increased with the fees, the survey found.

Nearly half (47 percent) of merchants surveyed said they had seen an increase in customer complaints. Additionally,

• 44 percent reported return fraud had increased;
• 39 percent saw a decrease in exchange rates;
• 37 percent said they’d lost customers over return fees;
• 34 percent reported a reduction in the average value of orders; and
• 24 percent saw a decrease in sales.

‘Bending The Truth’ OK?

Merchants are increasingly concerned about return fraud, with more than a quarter (26 percent) of those surveyed saying it strongly influences their return policies. About 9 percent of returns are fraudulent.

The survey showed that consumers, especially those who are younger, have casual attitudes about what constitutes fraud.

Close to two-thirds (62 percent) of consumers admit they’ve cheated retailers through bracketing (buying multiple sizes or colors of the same item to try at home) and wardrobing (wearing an item once and returning it), and more serious forms of fraud, such as sending back empty boxes, swapped items or overstating quantities.

Nearly half of consumers responding to the survey believe “bending the truth” when making returns is acceptable, especially if they are unhappy with the purchase.

“Return policies and their overall process have transformed into a strategic touchpoint for retailers, influencing how younger consumers shop from the outset,” Happy Returns co-founder and CEO David Sobie said in a news release.

“To stay competitive amid rising return rates and behaviors like bracketing, retailers must modernize their reverse logistics to enhance customer satisfaction, reduce fraud and safeguard their operations in today’s high-pressure retail landscape,” he said.

Retailers plan to manage holiday returns and fraudulent activity by increasing their focus on third-party logistics partners (49 percent), hiring seasonal staff to handle returns (43 percent) and extending return windows (37 percent).

These Retailers Charge Fee

Before assuming return policies, check the merchant’s website for specific information. To crack down on bracketing, some returns to some retailers can cost around $10 a pop.

In many cases, consumers can avoid fees if they return items to a physical store, even if they were purchased online. That is a common policy to reduce shipping and processing fees.

Amazon, Walmart and Target have all extended their holiday return periods on most items. Returns are generally free, and Walmart and curbside pickup may be available at some brick-and-mortar stores.

These retailers will charge a restocking fee, according to a report from The Street:

Per its website, Best Buy charges a 15 percent restocking fee on opened electronics such as drones, cameras and lenses, and a $45 restocking fee on activatable devices such as phones and tablets. These are standard fees that apply year-round.

Dillard’s charges $9.95 for each item returned by mail, plus a potential restocking charge.

JCPenney charges $8 for each mail-in return, and restocking and pickup fees for furniture and other larger items may cost an additional 15 percent to 20 percent, plus a standard $85 restocking fee.

J. Crew tacks on a $7.50 for each item returned by mail.

Kohl’s notes on its website that “shipping costs and surcharges are nonrefundable” and also that a 15 percent restocking fee applies “even if the returned item is defective.”

Macy’s deducts a $9.99 return shipping fee from refunds issued for online orders, unless the order was placed by a loyalty club member.

TJX stores — which include TJMaxx, Marshalls and HomeGoods — deducts $11.99 from the refund on each mailed return. The charge can be avoided by returning the items to a physical store.

Urban Outfitters charges a $5 restocking fee on most mailed returns.

Zara charges a $4.95 restocking fee on each item returned by mail.

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