- Americans will return more than $816 billion worth of merchandise in 2022.
- Returns experts say consumer frustration often stems from simple mistakes.
Consumers are getting money back for their returns faster than ever — for the most part.
Many retailers refund a purchase virtually the moment the item leaves the customer's hands, as soon as the package is scanned by UPS, FedEx, USPS, or by a worker at a drop-off point.
But plenty of refunds are tied up for days or even weeks, and industry experts told Insider the consumer is often to blame.
Consumers make the same mistakes over and over, said Thomas Borders, the vice president and general manager of Inmar Intelligence, a major processor of returns that operates 27 warehouses dedicated to returns and liquidations in the US. In addition to causing headaches for retailers and returns processors, these mistakes can also tie up consumers' refunds.
"Oftentimes, when consumers don't get credit in a timely manner, what do they do? They pick up the phone and call a customer-service number, write an email, put a complaint on social media," Borders told Insider. "But the retailer is in a difficult position there, because it's the consumers that aren't following the proper processes. It's making the processing of that return more challenging than it should be."
Here are the top-three mistakes consumers should avoid.
'Blind returns'
One of the most common mistakes consumers make is sending an item to the retailer without actually initiating the return online or sending the order paperwork. These cases are called "blind returns," Borders said.
"They just go online to research and find an address. And they send an item to the address they found," he explained.
When packages show up to warehouses that don't normally process returns, they can take much longer to process or may get lost in the shuffle. And even when a package shows up at the correct address without a return logged in the system, a refund can't be triggered as quickly. Inmar's team will need to play detective, looking at the return address and any other information on the package to try to figure out whose order it is.
"It creates problems for us, but also problems for our customer and ultimately problems for you, the consumer, because you're probably going to get credit much, much more slowly than you would have if you followed the prescribed path for making that return," Borders said.
Careless packaging
If the consumer skips the bubble wrap or padded envelope in favor of whatever box is lying around, the item may show up to the returns processor in much worse condition than when it arrived to the customer, and the refund could be delayed or denied.
"That's when you open packages that have leaking liquids and turned over powders. Leaks and spills may be completely unintentional, but they are going to create a problem for us," Borders said.
Poor packaging resulting in a damaged item can affect refunds, and it can also turn a resalable item or one that could be donated into garbage, Borders said.
Sending things back without tags
Tags or no tags, returns-processing workers will check for signs of wear. But for apparel in particular, the tag is an important identifier. Even though a garment may eventually get back into the hands of the retailer that originally sold it, the workers handling returns don't have a comprehensive knowledge of that company's inventory.
If the brand is using an outside returns-processing company like Inmar, the worker logging the tagless return may work with merchandise from many brands, and their actions are dictated by software.
The workers have to scan the tag so the system can tap into preset instructions to check that the item is in good condition and decide whether it's fit for resale in the store or at a discount retailer, or must be donated or trashed.
Without a tag, processing staff will have to take extra time to track down the barcode in the catalog of what could easily be hundreds of thousands of items for sale.
The fraud problem
Though it's a milder form of returns fraud, Inmar does regularly receive items with clear signs of wear. Deodorant marks, holes, wine spills, and pet hair are fairly common when consumers buy items with the intention of wearing them once and returning them.
The National Retail Federation has found that for every $100 in returned merchandise that retailers accept, they lose $10.40 to fraud. Half of cited fraudulent returns involve "used, non-defective merchandise."
Even when working with an outside company, retailers decide whether or not customers will get their money back for damaged merchandise.
Fraud doesn't necessarily slow down refunds, but it does create bugs in the system that can slow down returns for everyone. And as the total volume of returns continues to increase, retailers are going to be forced to crack down.
The long game
Returns are going to continue to get easier, said Borders, with "no-box, no-label" strategies becoming ubiquitous. But that often means that consumers need to be even more conscious of ever-changing return policies and procedures. And since these new returns scenarios are even easier to exploit, crackdowns could come in the form of individual bans on returning items at specific retailers.
"The short answer is some make the crediting decision as soon as you put the box in the mail or the package in the mail, and others don't make the crediting decision until they received some data or information from Inmar or whoever returns processors," Borders said. Especially when the call on whether to refund or not to refund is made in the warehouse, consumers need to follow instructions to the letter to get their money back fast.