Some online retailers are charging return fees and more may start

More stores charging for returns CTV's Peter Szperling reports some stores will charge a 'restocking fee' for returned items.

As holiday shoppers head to malls and brick-and-mortar stores, many continue shopping online. But free returns may become a thing of the past, as some online retailers are now charging fees to take back your items.

“It’s starting to become a little more common and the reason for that is the days of free returns are just not feasible anymore,” says retail analyst and author, Bruce Winder.

“It’s just too much money – too much in the handling cost; it’s a massive cost for retailers,” he says.

Winder adds that online returns are three times that of brick-and-mortar stores.

“There’s people who say, ‘Well, I’m not sure which colour top I’d like, or shirt I’d like – so I’ll buy five colours and return three.”

With inflation, gas prices, supply chain issues and the cost to the environment, some retailers say the current online shopping model is no longer working.

For example, clothing retailer H&M is testing a fee for returns in Europe. In an e-mail statement, a company spokesperson wrote,

“To return H&M Canada items via Canada Post, there is a return shipping fee of $4.99 that is automatically be deducted from the customers refund. However, for H&M Loyalty Members, the return shipping fee is waived. Charges for online returns look different from market to market and in the near future, H&M will start testing online return fees in some European markets for all customers.”

A quick check online shows most companies post return policies. For example, at Ardene, a refund will cost a $5 restocking fee. Urban Outfitters says a $5 restocking fee will be deducted from your refund for most mailed returns. Footlocker Canada takes $6.99 from your refund for mailed returns.

“Coming out of the pandemic, we as consumers are all used to shopping online and we have certain expectations of how returns work. We expect a certain level of convenience, and we expect that if we buy things that don’t fit, we return it,” says Sylvia Ng, CEO of ReturnBear, a company working with retailers to make it easier to return items by creating drop-off points which can help reduce shipping costs.

“Restocking fees have always been there, it’s just, unfortunately due to the economic times, it is harder for these merchants now because the costs are higher than they used to be,” says Ng. “Merchants are going to find ways to make their business more efficient.”

The Retail Council of Canada says restocking fees are nothing new, but every product is different.

“Depending on the commodity, handling returned items can be a costly and a labour intensive process. Retailers are focussed on ensuring products returned to them have a strong, full life cycle and seek to minimize goods having to be destroyed or moved to a landfill,” a statement says. “The decision to charge restocking fees is very specific to the retailer - practices and policies vary across the industry.”

To avoid confusion over returns, inquire about a store's return policy before you purchase something from them. Ask if you need a receipt, sales tags and the original packaging, if it a full refund or store credit, if a restocking fee applies, and if there are shorter return times and who pays return shipping.

--With files from CTV Toronto’s Pat Foran.