Starting March 20, Walmart has increased return shipping costs for orders fulfilled by third-party sellers, according to a monthly announcement on the retail giant's marketplace portal.
The retail giant pointed to “changes in market conditions” for the rate hike. The company does not disclose return shipping costs, but says it is the first price increase in two years.
Walmart said its rates are among the lowest in the industry and there will be no price increases for orders shipped to e-commerce sellers through Walmart Fulfillment Services. The retailer said sellers can add a “Keep It Rule” for unwanted returns to avoid paying return shipping costs. This allows customers to keep their items and receive a refund when they initiate a return online or in-store at Walmart.
The new “Keep It Rule” outlined on Walmart's Marketplace portal is also part of a growing trend in the retail industry. Amazon and other retailers have started offering “keep it” options on some low-priced items. Retailers track customer refunds and limit refunds if abuse or fraud is suspected.
goTRG's 2023 report found that 59% of U.S.-based retailers employ a “keep-it” service for returns where shipping is not economical.
Walmart is not the only retailer to charge return fees as sellers seek to minimize reverse logistics costs. With Amazon and other retailers offering easy-to-return policies, more consumers are overpurchasing products they don't need, believing they can return them for a full refund. However, the return logistics are not free.
Blue Yonder recently surveyed retailers on e-commerce returns and found that 89% have increased restocking and shipping fees and shortened return windows in the past year.Blue Yonder also reported Despite the higher limits59% of retailers have seen a decrease in profits due to an increase in online returns.
Retailers are changing return policies to control cost increases and recover some of their costs through customer fees. Blue Yonder reports that reversing returned orders incurs many costs associated with shipping, transportation, processing, replenishment, and customer service.
Adobe Analytics predicted that U.S. online revenue will exceed $221 billion in 2023, accounting for 20-30% of all online sales. The National Retail Federation predicts that in-store shopping returns will be 13% of total sales in 2023.
