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Buying online? Look at the return policy before checking out to avoid unexpected fees

By Heather Butts and Michael Lee

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    TORONTO (CTV Network) — As some retailers rethink the way they handle online returns, anyone still shopping this holiday season may want to give those policies a read before hitting the checkout button.

Many retailers offer free returns for products purchased online, and some are exploring ways to recoup the losses by charging a restocking fee to return items by mail.

“It’s just too much money,” retail analyst Bruce Winder told CTV News. “Too much in the handling cost, it’s a massive cost for retailers.”

Canada experienced a large jump in online shopping throughout the COVID-19 pandemic, figures from Statistics Canada show, as certain public health restrictions limited which stores could remain open and, eventually, how they could operate.

Inflation and rising interest rates have also made shopping, and the cost of doing business, more expensive.

The Bay allows free in-store returns but charges a $10 fee to return items by mail. Other retailers, such as Urban Outfitters and Ardene, charge a $5 restocking fee.

“Restocking fees have always been there,” ReturnBear CEO Sylvia Ng told CTV News. “It’s just unfortunately, again due to the economic times, it is harder for these merchants now because the costs are higher than they used to be.”

In some cases, those costs are now being passed on to the consumer. Retailers could also end up shortening their return periods for online shopping, retail strategists say, as the longer an item sits at home, the more money a retailer can lose.

“Fast fashion retailers, such as say an H&M or a Zara, they can completely turn or run out of that inventory,” J.C. Williams Group retail strategist Lisa Hutcheson told CTV News.

“And now it becomes this one-off and it’s probably on markdown, so the retailer’s lost the ability to sell it at full price.”

Another way retailers are looking to reduce returns is by making changes to the shopping process.

“The retailer’s now looking at ways to slow down that purchase so that the shopper really is making sure it’s the right item and they do want it,” retail adviser David Gray told CTV News. “I find that incredibly ironic given all the effort to be speedy fast and get a click.”

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