Amazon and Walmart are among the big retailers trying out a new way of handling refunds, according to a report from The Wall Street Journal (WSJ). Customers can ask for a refund, but they might not have to return the item even if they’re granted one.
The idea, which uses artificial intelligence (AI), is supposed to cut down on work and costs for the companies, which have seen an unprecedented surge in activity because of the pandemic.
WSJ reported that Target is also among the retailers practicing the measure, and a spokesperson said the company gives customers refunds and encourages them to donate or keep the item if it’s deemed not necessary to return.
A Walmart spokesperson, according to WSJ, said the option to keep the refunded item is usually for items the company doesn’t plan to resell. The option is also determined on a case-by-case basis, depending on the individual customer’s purchase history and the cost of processing the return.
The new way of handling returns comes from a spate of returns seen in 2020. The number of eCommerce packages returned soared 70 percent compared to 2019, and because of the pandemic, many customers didn’t want to take the items to physical stores, WSJ reported. Additionally, many returns occurred because of the higher eCommerce sales in general that were spurred by the pandemic’s digital shift, as items sold online are typically more likely to be returned than goods purchased in stores.
The U.S. Postal Service, FedEx and UPS have all reported higher return rates this year, WSJ reported, and delivery firms are working with retailers to help get costs down through giving scannable codes that some stores like Walgreens or UPS stores will accept from customers to process the returns.
PYMNTS reported on the high return rates, citing a survey from Ware2Go, which said 80 percent of respondents were considering a return. Retailers were responding quickly with new partnerships to help facilitate the returns.