Amazon has reportedly instituted a new fee for certain returns at UPS stores as the ecommerce giant aims to reduce the impact of return costs, according to Seeking Alpha. The charge only occurs if return options at Whole Foods, Kohl’s or Amazon Fresh locations are closer, or just as far as, the nearest UPS store offering returns.
The new fee is in addition to the existing charges already incurred by customers who use UPS stores, which cover the cost of the delivery driver needed to pick up the items. An Amazon spokesperson noted that the fee was small and that the retailer will continue to “offer convenient, easy returns to Amazon customers, with one or more options for label-free, box-free returns at no cost” in a statement sent to Seeking Alpha.
Retailers across the industry have been looking for ways to defray the cost of returns after the pandemic-driven rise in ecommerce caused a parallel increase in return rates. This increase isn’t necessarily a bad thing — 44% of retailers reported that customers who often make returns exhibit higher lifetime value, in Retail TouchPoints’ 2022 State of Returns survey.
“There is no way to solve this problem,” said Spencer Kieboom, Founder and CEO of Pollen Returns in an interview with Retail TouchPoints. “You can’t solve returns, there will never, ever be a day where somebody goes, ‘We had no returns last year.’ That means you’re out of business. Returns are essentially the last link to the circle that closes the consumer loop when it comes to a decision.”
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However, returns’ impact on the bottom line can be significant. Retailers are developing numerous strategies to help them manage returns without inconveniencing their customers. Some, like Walmart, are investing heavily in automation to help reduce the cost of any items that pass through its supply chain. Others, like Hibbett Sports, are turning to third-party partners that can boost convenience for shoppers. This is an approach Amazon has long embraced, most recently through a pilot return program at Staples stores.
