Overloaded with Junk, Retailers Mull Refunding Unreturned Items

Stores may soon let you keep your money and your returned goods due to inventory glut, supply chain sorrows, and other things that fell apart

Coming soon, if you return an item to a major retailer, you’ll get your money back and get to keep the thing. Due to a number of operating difficulties such as spiking gas prices, supply chain woes, and too much inventory, have led many stores to conclude that it’s just too much of a hassle to deal with you and your unwanted junk.

Over the last few weeks, major chains such as Walmart, Target, the Gap, and American Eagle have all reported in their latest earnings calls that they have too much inventory—notably in categories ranging from spring apparel, workout clothes, garden furniture, and kids’ toys. And it’s costing a fortune just to store all the excess goods that consumers wouldn’t have in their homes.

With all that in mind, stores are considering the idea of simply refunding the customer’s money and letting them keep the bauble they’d intended to be rid of.

“It would be a smart strategic initiative,” Burt Flickinger, managing director of retail consultancy Strategic Resource Group, told CNN. “Retailers are stuck with excess inventory of unprecedented levels. They can’t afford to take back even more of it.”

Some items can be put right back on the shelves and sold. Some items are damaged, however, and stores usually sell those to liquidators. They can also sell returned merchandise to markets in different countries. But that’s in normal times.

“Given the situation at the ports and the container shortages, sending product overseas isn’t really an option,” said Flickinger.

Getting to keep the item you return isn’t unheard of. Amazon does it. And Glossier, a $1.8 billion direct-to-consumer skincare company, processes customers returns but tells them to keep the item and “give it to a friend,” making it more than a generous return policy, but also a social strategy.

Of course, if a “keep it” policy is implemented, stores will have to watch out for scammers, says Keith Daniels, partner with Carl Marks Advisors.

“One thing retailers need to track and ensure is that customers that become aware of the (Keep it) policy do not begin to abuse it, by seeking free merchandise over a series of orders by getting a refund but getting to keep the merchandise,” said Daniels.

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