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Shopping online doesn’t always go as planned. That polyester robe might be too scratchy. Those sparkly stilettos might be a size too small (or just a bad idea).

But sometimes, when you try to send the item back, you get a surprising message from the retailer: Here’s your money, but the product — you can just “keep it.” That’s right, they don’t want those heels, either.

Nearly 60 per cent of retailers have keep-it policies for items that aren’t financially viable to ship back, according to a 2023 survey on holiday shopping trends by goTRG, now called ReturnPro, a firm that helps retailers including Walmart manage returns. Most companies don’t advertise the policy prominently.

Sometimes called returnless refunds, these policies are a response to a problem as old as e-commerce: how to limit the flood of online returns, which are time-consuming and expensive.

Average retailer

One estimate last year from the National Retail Federation showed that for every $1 billion in sales, the average retailer sustained $145 million in returns. The pain is magnified during the winter holidays, a peak shopping season.“Returns are always a loss leader,” said Sender Shamiss, CEO of ReturnPro. “In some cases, it costs more than the item itself.”

Keep-it returns have been around a long time for bulky items, such as furniture and mattresses, that are cumbersome to return, Shamiss said. The policy was applied to more categories during the pandemic as online shopping boomed, and it is now commonly used by a host of retailers, including Amazon, Shein, Target and Temu, Shamiss added.

“In some cases, when a customer requests a refund, Temu may allow them to keep the item without returning it,” the online retailer said in a statement, adding that “it helps simplify the shopping experience and gives customers peace of mind.”

Online retailers are most likely to offer keep-it returns on low-priced items, where putting it back into the supply chain isn’t worth it, Shamiss said. Among their considerations are shipping expenses, labor costs for processing returns and the profit margin on the product. About 64 per cent of items that were eligible for such returns cost less than $20, according to a survey by ReturnPro that is set to publish this month, and 83 per cent were under $30.

Strict criteria

But if all this leaves the impression that retailers have become lax about returns, that’s not necessarily the case. In a survey this year by ReturnPro, 52 per cent of retailers that offer keep-it returns said they were also adding stricter criteria for returns. Many use a “customer trustworthiness algorithm” — or, in simpler terms, an assessment of whether a shopper has too many returns on his or her record.

The companies may limit returns from such customers and those who seem to be engaging in practices like “bracketing” (ordering the same clothing item in various sizes with a plan to return those that don’t fit) and “wardrobing” (buying a dress, for example, for a party with the intention of returning it).

ReturnPro uses scanners in warehouses to detect problems in items that would make them ineligible for a refund.

“There’s a lot of really cool concepts and things that we put into play to solve the problem of returns,” Shamiss said.