Retailers Face Issues In Creating Return Polices

Ames, Iowa — Retailers are facing a dilemma with their return policies as the holiday shopping season is upon us.

ISU assistant professor of supply chain management, Robert Overstreet, says return policies that are too restrictive can turn off customers. He cites online retailer L.L. Bean’s decision 2018 to change the return policy that allowed you to bring something back with or without a receipt.

Overstreet says L.L. Bean made the change after they found some people were taking advantage of the policy.

Overstreet says increased costs and supply chain backups now have focused attention again on return policies.

Overstreet says some companies figure in the cost of returns in their sales, but many can’t. He says some retailers have decided to deal with it in another way.

He says having overly lenient return policies in an effort to get customers can backfire.

He thinks such policies will be an incentive to people who already are abusing the system.

The National Retail Federation says if consumer habits mirror previous years, 20 to 30 percent of the merchandise they buy this holiday season will be returned.