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Holiday Returns: How to Get Your Money Back With Less Hassle

Watch out for new hidden fees, shorter timelines

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The gift is the wrong color. It’s two sizes too big. Or it’s just wrong — as in why in heaven’s name would Uncle Larry think you needed taco holders? ​

​Next comes the aggravation of returning the gift to the retailer, which entails a dreaded postholiday trip to the mall or the search for a suitable cardboard box and the always-missing tape. But as you consider returning holiday gifts this year, take heart: Retailers, who recognize returns can be an opportunity for more sales, are learning to streamline an often fraught process. That said, return with care. ​

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​“A return is actually an opportunity for retailers to build loyalty,” says Mark Mathews, vice president of research and industry analysis for the National Retail Federation (NRF). On average, 16.5 percent of sales result in a return, according to the NRF, but each return brings customers back into a store or to a website. And if the process is efficient, it encourages them to shop there again, Mathews adds.​

​That goal has led to partnerships between retailers and third-party logistics companies that allow consumers to drop retail returns at places like UPS stores, Staples, Kohl’s or Whole Foods Markets. In some cases, consumers no longer have to box or label the item. Instead, they navigate the return online for an exchange, refund or merchandise credit, then receive a QR code from the retailer that is scanned at the drop-off site. That’s similar to how Amazon handles most returns, allowing them to be mailed or dropped off at counters or self-service lockers located at both large and small retailers. ​ ​

A good return experience lowers the hassle and cost for both sellers and buyers, says David Sobie, founder of Happy Returns, a third-party return service now owned by PayPal. Happy Returns manages “return bars” in retail outlets such as Ulta Beauty and Staples, which accept online merchandise from Levi’s and other online retailers. Returns are then bundled before being shipped to the retail home base, which cuts shipping costs.​

​Consumers, who really learned to love online shopping during the pandemic, expect returns to be free and easy, Sobie says. About 50 percent of shoppers say they have abandoned a virtual shopping cart before checking out because an online retailer didn’t have an acceptable return policy, according to a Happy Returns survey. Aggregating returns is also good for the environment, Sobie adds. “It’s really about removing cardboard from the equation. And reducing the number of shipments.”​

​Return pitfalls to watch out for​

​Meanwhile, some retailers, in an attempt to recoup losses from either fraud or returns that are not resalable, have shortened the return window or now charge a “restocking” fee. Many also charge for shipping if shoppers return items by mail. ​

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​“This year, many retailers have modified their return policies to make them more restrictive,” says Cari Fais, acting director of the New Jersey Division of Consumer Affairs. “So, shoppers should review a store’s return policy, even if they’ve shopped there before to see if there have been any changes to the policy since their last purchase.”​

​No matter the policy, sometimes a return goes wrong because either the consumer or the retailer doesn’t play by the rules, which are sometimes minimal. Although federal law requires retailers to accept returns for goods that are defective or if there is a broken contract, most laws on returns are set by states, and only a few, such as Massachusetts, even require retailers to post return policies “conspicuously.” ​

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​On the flip side, retailers lose about $10 of each $100 in returns, thanks to consumer fraud, according to the NRF. This includes strategies like “wardrobing” — buying that special holiday outfit, wearing it and then returning it. ​

​So what can you do to make sure returns go easily for the giver and receiver? Consider these tips from consumer affairs experts. ​

  • Check the return policy before you buy. If you don’t find it acceptable or it’s too costly, see if you can find the product from another seller with a better policy.​
  • Check your state’s laws on returns and credits. State attorneys general have a consumer affairs division that posts state law as it applies to retailers, both brick-and-mortar and online. ​
  • Keep records. Hang on to receipts, emails, tags. Or photograph them as you shop. While you’re at it, snap a photo or grab a screenshot of the return policy.
  • Missing a receipt? If you don’t have the receipt, check your credit card record for proof of purchase. And be prepared to show a personal ID when returning. The store may require you to take a merchandise credit instead of a refund and, without a receipt, may only refund the current price, even if it’s significantly lower. Amazon has specific instructions on how to return a gift based on the order number instead of a receipt but will require you to create an account. 
  • Make sure you know the actual seller’s policy. Etsy, for example, allows individual sellers to set their own return policies. That can be true on Amazon as well, which is also a marketplace. So don’t count on the aggregate website to help you out with a messy return.​
  • Consider geography. If ordering from overseas, be sure it’s worth the cost to return a damaged or defective item.​
  • Pay by credit card. This gives you the option of using the card company as leverage if a return goes wrong.​
  • Move quickly. Although holiday policies vary, some retailers have tightened the window for returns. Don’t procrastinate. Policies might be more lenient during the holidays, especially if you’re willing to settle for a merchandise credit. And if you don’t have a receipt, you’ll want to return gifts before January sale prices go into effect. ​
  • Check merchandise credit policies. Federal law requires that merchandise credits be good for five years. Some states extend that; in Massachusetts, for example, store credits are good for seven years. ​
  • Follow the rules. Fraudulent returns just mean retailers have to tighten return policies or raise prices to cover losses. ​
  • File an official complaint. If something goes wrong, file a complaint with your state office of consumer affairs. ​

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