☕ Refund, please!

On the big business of returning gifts... [Advertisement] November 24, 2023 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [Bose]( Good morning and Happy Black Friday, a day we used to celebrate by waking up at 7am and swarming a Best Buy or a Victoria’s Secret. But now, most of the cart-stuffing happens from the comfort of the couch we’ve been horizontal on since our second round of pumpkin pie. Today’s newsletter is a special Black Friday edition about the big business of returns. Americans send back hundreds of billions of dollars worth of items they don’t want every holiday season, forcing retailers to adjust their loose return policies and sparking the creation of a new industry: “Reverse logistics.” We’ll get into all that and reveal the most bizarre things you’ve ever seen returned. It’s not pretty. —Molly Liebergall, Cassandra Cassidy, Matty Merritt, Dave Lozo, Abby Rubenstein, Neal Freyman ECOMMERCE [Returning holiday gifts may be harder this year]( [An Amazon returns desk at Whole Foods]( Lindsey Nicholson/UCG/Universal Images Group via Getty Images It’s turkey-cranberry-sandwich-for-lunch day, which means two things are about to pop off: hometown bars and holiday shopping. But you may want to read the fine print before hitting “Add to cart” with the reckless abandon of anyone going out tonight—the [golden age]( of free returns is ending. Retailers are [rolling back]( the loose return policies that helped propel online shopping’s upheaval of in-person buying. An estimated 44% of retailers now charge customers a fee to ship something back, up from 33% in 2021, according to post-purchase-logistics company Narvar. Retailers that now charge customers in some areas to send back their online purchases include American Eagle, J.Crew, Saks Fifth Avenue, H&M, Zara, and [many more](. Why? Processing returns costs companies ~$165 million for every $1 billion of merchandise they sell, according to the National Retail Federation. The pandemic prompted people to shop remotely, with folks often buying more than they meant to keep, causing retail return rates to jump 14% from 2019 to 2022, according to Narvar. Even Amazon is feeling it The e-commerce giant, which led the free returns movement, brought in nearly $514 billion in revenue last year and paid $84.3 billion to process returns, more than [twice as much]( as it did in 2019 when the company made $280 billion, according to Statista and The Information. Amazon now charges $1 for returns made at a UPS store when there is a closer Whole Foods, Amazon Fresh, Amazon Go, Staples, or Kohl’s—which are all free return locations. - Incentivizing these in-store returns saves Amazon money on costly UPS shipping, but the new logistics strategy also aims to boost foot traffic and impulse purchases at partner stores. - That’s one reason why Staples decided to start widely accepting the e-commerce giant’s returns this summer: Amazon’s returns partnership with Kohl’s netted the department store 2 million new customers in a year. Bottom line: Check the return policy before ordering your Black Friday/Cyber Monday haul, and for your favorite retailer’s sake, pray they’re not too strict—[bad return experiences]( could jeopardize 21% of online sales this season, Forbes estimates.—ML   PRESENTED BY BOSE [Music to your gift-giving ears]( [Bose]( Hear that? It’s not just the sound of sleigh bells jingling. It’s also the high-quality, immersive sound coming from Bose’s premium audio products. Whether you’re listening to a podcast, an orchestra, or your fave playlist, treat your ears to silky sound that situates you right in your listening happy place. And here’s some music to your budget’s ears. [This Black Friday]( you can get the best deals on Bose’s latest premium audio products, including the new QuietComfort Ultra Earbuds and QuietComfort Ultra Headphones. Go ahead—elevate your gift-giving status to legendary. PS: While you’re at it, snag a Bose Smart Ultra Soundbar for a more cinematic TV-watching experience. Press play on the perf gift. [Bose’s selection (and deals) await](. LOGISTICS [The ‘reverse logistics’ industry is booming]( [Photo of rack for returns in a distribution warehouse]( Rainer Puster/Getty Images As retailers crack down on returns to avoid hearing another “it was broken when I got it” excuse, some companies are counting on you to send your holiday gifts back. A “reverse logistics” industry has sprung up in recent years to take advantage of the more than $300 billion in returns Americans make every holiday season. Reverse what? Reverse logistics—or the supply-chain processes of returns—is a little-known but rapidly growing sector of the economy that’s booming alongside the rise in online shopping that started during the pandemic. - Venture capital firms pumped nearly $200 million into reverse logistics startups last year—over 2.5x as much as in 2021, according to [Bloomberg](. - [Loop Returns]( which sells software to companies looking to streamline the return process on the customer side, raised $115 million at the end of 2022. Established companies see potential in reverse logistics as well. Last month, Uber launched a feature enabling drivers to [pick up]( your packages and bring them to a returns center. Meanwhile, UPS, whose returns business has grown 25% since 2020, [recently acquired]( the startup Happy Returns. Zoom out: Historically, returns would head straight to a landfill, but today the reverse logistics industry focuses on repairing, reselling, and recycling the stuff you don’t want—so you can feel less guilty about making use of that gift receipt.—CC   CONSUMER [The psychology of sending back jeans]( [Jerry trying to take Kramer’s jeans off in Seinfeld]( Seinfeld/NBC Returning a pair of jeans might feel like the most mind-numbing activity since learning a new board game. But what goes through a person’s mind as they retape the shredded mailer plays a huge role in the more than $620 billion worth of returns retailers are expecting to sort through this year. The money is already spent. TikTok calls it “Girl Math,” Nordstrom calls it store credit, but a Harvard Business Review study published this year says it’s really just the [Refund Effect](. Consumers are more likely to spend refunded money than a bonus or unexpected cash they found because most people see the money they receive from a return as already lost. - The researchers recommend that if retailers want to keep that cash in their ecosystem, they have to act fast during the return process to either offer store credit or exchange the item for something else. - Because once the money was back on a consumer’s credit card, the stores weren’t likely to see it again (and the customer wouldn’t spend it differently from other money). Sometimes it’s better to sit back and wait it out: A 2016 [paper]( from the University of Texas at Arlington and Dallas found that the more lenient a retailer’s return policy, the more likely consumers are to buy something and not return it. Companies like Zappos, REI, and Amazon locked in customer loyalty with their “we’ll take whatever, whenever” return approaches. But now, as you just read, these companies are quietly closing their once vast return windows. With the explosion of online ordering during the pandemic, return rates skyrocketed and still haven’t returned to pre-Covid levels.—MM   TOGETHER WITH WAYFAIR [Wayfair]( You have until midnight. No, your chariot won’t turn back into a pumpkin—but [Wayfair’s Black Friday]( deals end tonight. The sand in the hourglass is flowing on the lowest prices of the year, including 60% off tableware, 65% off living room seating, and more. [Shop now before they’re gone](. POLICIES [Returns can be easier than you think sometimes]( [A suit with a sign saying the store gives refunds if you lose your job]( Scott Olson/Getty Images Returning a gift can be more fun than receiving a gift. Maybe it’s the wrong color or maybe you already have it or maybe there’s nothing you find more exhilarating than the best one-size-fits-all option: store credit. It can be a little nerve-wracking to step up to the return counter, but some stores are extremely lenient. Here are some of the more generous return policies we could find: - Petco refunds dead fish. There are some caveats—the fish has to have died within seven days of its being delivered to you, and you must email a photo of the deceased fish. “Please do not mail any specimens back to Petco,” [the website pleads](. - [Home Depot]( has a relaxed plant policy. Perennials, trees, roses, and shrubs have a one-year guarantee and can be returned for store credit (other plants have a 90-day return window). - Ikea will buy back your old furniture. Moving to a new place and not sure what to do with the bookshelf that took you forever to build? [Sell it back to Ikea]( and they’ll give you a voucher. - Costco will let you return almost anything, any time. [The exceptions]( include electronics, cigarettes (where prohibited by law), and gold bullion, the three staples of any trip to Costco. - Trader Joe’s looks out for the average Joe: Virtually all items [can be returned]( for a full refund, even if you don’t have a receipt and even if you’ve eaten most of the chocolate covered pretzels already. - Zappos gives you a [full year](. Just make sure the shoes are unworn and in the original packaging. - Athleta offers [a 60-day tryout](. Buy some workout clothes and, if you don’t like them after two months, send them back. That’s a real no-sweat return policy.—DL   COMMUNITY [Your most bizarre returns stories]( [Customers demanding a refund from Mr. Krabs]( SpongeBob SquarePants/Paramount Global via Giphy We asked Morning Brew readers who worked in retail to share the most bizarre customer returns you witnessed, and the main takeaway: Humans have chutzpah. The winning responses “Our grocery store had a ‘no questions asked’ return policy, and every week a woman would bring in a carton of eggs containing one egg left and say they were no good. Every week she got a brand new carton, no questions asked.”—Dave from Connecticut “Shamefully, I was the one doing the returning. I bought a fake mustache and super-glued it to my face to go as Tom Hanks from The Polar Express for a costume contest. While I won the contest, a friend had to rip off the mustache later that night. It hurt. The next day I took that used mustache with dried super glue and some of my own mustache hairs and returned it for $6.50. Tom Hanks—please don’t judge me.”—Colin from Bentonville, AR “While working a returns desk at Home Depot, a customer brought in a block of bright pink paper to return. I explained that I cannot return it because they didn’t buy it from us and I have no sku for it. The customer kept insisting that Home Depot and Office Depot were the same company and he should be able to return it. Enter the manager, who invented a sku, gave the customer money for the item, and handed the paper to me to use for our printers. We had bright pink reports for a week.”—Melissa from Texas “Worked in a grocery store and a woman returned the fat from a roast beef. The manager weighed it and refunded her some money.”—Anna from Raritan Township, NJ “Open box of condoms...claimed they didn’t fit lol”—Shelly from New Jersey “My FIL once returned a roast, cooked and half-eaten. When the store employee challenged him, he said, ‘Do you want to tell my wife she’s a bad cook?’ He got a full refund.”—Anonymous   RECS [Friday to-do list] Watch: The inspiration for Pepsi's hated $1 million logo is [kind of unhinged](. Eat (again): What to make with your [Thanksgiving leftovers](. DIY: How to [fix your stuff](. Geographic fun: This game asks you to guess which city is [more north](. 1 fund, 100 companies: Help [power your portfolio]( with innovation. Access some of today’s most cutting-edge companies—all in one investment—with Invesco QQQ ETF. [Learn more](. Invesco Distributors, Inc.* *A message from our sponsor. GAMES [The puzzle section](#) Picdoku: Take all the Thanksgiving leftovers in your fridge and turn them into a sudoku puzzle—that’s what we did here. [Play Picdoku](. Friday puzzle Each pair of hints below relates to two words. One of the words is the other one spelled backward. What are the word pairs? Example clue: married, moisture Answer: wed, dew 1. dwell, wicked 2. portion, catching device 3. prize, furniture compartment 4. drinking aid, skin blemishes 5. stopper, big swallow 6. implement, stolen goods 7. precinct, illustrate SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( ANSWER 1. live, evil 2. part, trap 3. reward, drawer 4. straw, warts 5. plug, gulp 6. tool, loot Written by [Neal Freyman]( [Molly Liebergall]( Dave Lozo, [Cassandra Cassidy]( [Matty Merritt]( and [Abigail Rubenstein]( Was this email forwarded to you? Sign up [here](. Take The Brew to work - Marketers: [Marketing Brew]( - Corporate: [CFO Brew](  [HR Brew]( - Tech: [IT Brew](  [Tech Brew]( - Retailers: [Retail Brew]( - Healthcare: [Healthcare Brew]( Get smarter in just 5 minutes - Money & Career: [Money With Katie](  [Raise](  [Bossy]( Business education without the BS - Programs in [Business Essentials]( [Analytics]( and [Leadership]( Interested in podcasts? - Check out ours [here]( [ADVERTISE]( // [CAREERS]( // [SHOP]( // [FAQ]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright © 2023 Morning Brew. All rights reserved. 22 W 19th St, 4th Floor, New York, NY 10011