Retailers Revisit ‘Free Shipping, Free Returns’ as Costs Soar


H&M may become the latest merchant to begin charging a fee when customers return items they’ve purchased online.

The fashion retailer is going to test this initiative, H&M CEO Helena Helmersson said Thursday (Sept. 29) during a conference call.

“We are about to test return fees in a few of the markets to see the response from the customers,” Helmersson said during the call held in conjunction with the release of the company’s nine-month earnings report covering the period ended Aug. 31.

The company will soon test the fees in Norway and the United Kingdom in order to mitigate the rising costs of materials and freight, Bloomberg reported Thursday, citing an interview with Helmersson.

An H&M spokesperson told PYMNTS via email that the company has no additional comments, other than that it is testing online return fees in a few select markets.

H&M would join a growing number of merchants that are instituting return fees on items purchased online.

In the case of H&M, the change is being driven by an effort to reduce costs. Helmersson mentioned the test of return fees in response to an analyst who asked if the company would introduce such fees like many of its peers have done in response to rising costs.

H&M’s profits for the most recent quarter were impacted by rising costs associated with materials, freight and a stronger U.S. dollar, Helmersson said in the Thursday report.

Fast-fashion giant Zara began charging customers the equivalent of $2 to $4 if they want to return items by mail after testing the policy in South Korea at the end of 2021. The change was well received, and Zara extended it to 38 markets.

Read more: Zara Limits Free Returns to in-Store Only, Reports No Impact on Sales

U.K. retailer Boohoo began weighing this option in June.

See more: Boohoo Could Join Other Brands Charging for Online Returns

In response to the number of returns faced by merchants, PayPal announced in March that it’s letting merchants that are part of its network use its Happy Returns service and exchange portal at no additional cost.

Read more: PayPal’s Reverse Logistics Unit Brings ‘Happy’ to the Dreary Returns Biz

PayPal Vice President of Happy Returns David Sobie told PYMNTS’ Karen Webster in an interview that when retailers take the friction out of returns for shoppers, “This is a new way to acquire customers.”

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