This is one of the less publicized policies of some of America’s biggest retailers: They sometimes give customers full refunds and also let them keep items they no longer want.

No-return refunds are a tool that more and more retailers are using to satisfy online shoppers and to reduce shipping costs, processing times and other growing costs associated with returned products.

Companies like Amazon, Walmart, and Target have decided that certain items aren’t worth the cost or hassle of returning them. Think about a $20 t-shirt that might cost $30 in shipping and handling to recover. There are also single-use items, like a pack of plastic straws, that might be difficult to resell or medications that might be dangerous to put back on the market.

Analysts say companies offering no-return refunds do so somewhat sporadically, typically reserving the option for items with low cost or limited resale value. But some online shoppers said they were also allowed to keep more expensive products.

Dalya Harel, 48, recently received a no-return refund after ordering a desk on Amazon that cost around $300. When the desk arrived, she noticed that it was missing some key pieces and would be impossible to assemble, Harel said. She could not request a replacement and get it in a timely manner at her New York City lice detection service office because the item was out of stock.

Harel, who regularly buys towels and other products on Amazon for his business, said his team contacted the company’s customer service. She was pleasantly surprised to learn that she would get a refund without having to return the desk.

“It’s one less headache to deal with,” Harel said. “It was really nice for us to not have to make an extra trip to the post office.”

She used the desk pieces to create makeshift bookshelves in her Brooklyn office.

A mysterious process

While the retail practice of letting customers keep their merchandise and get their money back isn’t exactly a trade secret, how it works remains shrouded in mystery. Companies do not want to disclose the circumstances in which they issue no-return refunds due to concerns about the risk of return fraud.

Even though brands don’t provide details about these policies on their websites, no-return refunds are increasing in at least some retail locations.

Amazon, which industry experts say has been doing this for years, announced in August that it would extend the option to third-party sellers who make most of the sales on the e-commerce giant’s platform. Under this program, sellers who use the company’s fulfillment services in the United States could choose to offer their customers a traditional refund for purchases under $75, with no obligation to return this that they ordered.

Amazon did not immediately respond to questions about how the program would work. But publicly, it has offered no-return refunds more directly to international sellers and those offering cheaper products. Items sold in an upcoming section of Amazon’s website that will allow U.S. shoppers to buy low-cost products shipped directly from China will also be eligible for no-return refunds, according to documents seen by The Associated Press .

In January, Walmart offered a similar option to merchants who sell products on its growing online marketplace, leaving it up to sellers to set price limits and determine whether or how they want to participate.

China-founded e-commerce companies Shein and Temu say they also offer no-return refunds on a small number of orders, as do Target, online shopping site Overstock and online pet products retailer company Chewy, which some customers said encouraged them to make unwanted donations. items to local animal shelters.

Wayfair, another online retailer cited by some customers as offering no-return refunds, did not respond to a request for comment on its policies.

Deciding who is eligible – and when

Overall, retailers and brands tend to be careful about how often they allow customers to keep items for free. Many of them deploy algorithms to determine who should have this option and who should not.

To make the decision, algorithms evaluate several factors, including how much a buyer can be trusted based on past purchase and return patterns, shipping costs, and demand for the product on hand. of the customer, according to Sender Shamiss, CEO. from goTRG, a reverse logistics company that works with retailers like Walmart.

Optoro, a company that helps streamline returns for Best Buy, Staples and Gap Inc., has observed retailers assessing a customer’s lifetime value and extending return-free refunds as a sort of unofficial loyalty perk and discreet, according to CEO Amena Ali.

The online retail king appeared to verify that the process works this way.

In a statement, Amazon said it was offering no-return refunds on a “very small number” of items to “convenience customers.”

The company also said it received positive feedback from sellers about its new program that allowed them to tell customers they could keep certain products and still get a refund. Amazon said it monitors for signs of fraud and sets eligibility criteria for sellers and customers. He did not provide further details on what that encompassed.

Online purchases and return costs

Some retailers are also tightening the liberal return policies they have long employed to encourage online orders. Shoppers who loved shopping on their computer or cell phone became accustomed to filling their digital shopping carts with the intention of returning items they didn’t like.

Online shopping also increased significantly during the COVID-19 pandemic, when homebound consumers reduced their trips to stores and relied on sites like Amazon for everyday items. Retail companies have cited in recent years that returns are becoming more expensive to process due to increased volume, rising inflation and labor costs.

Last year, U.S. consumers returned $743 billion worth of merchandise, or 14.5% of the products they purchased, up from 10.6% in 2020, according to the National Retail Federation. In 2019, returned merchandise was valued at $309 billion, according to loss prevention company Appriss Retail.

Last year, about 14% of returns were fraudulent, costing retailers $101 billion in losses, according to a joint report from the National Retail Federation and Appriss Retail. The problem ranges from low-level forms of fraud — such as shoppers returning previously worn clothing — to more complex schemes by fraudsters returning shoplifted merchandise or items purchased with stolen credit cards.

To deter excessive returns, some retailers, including H&M, Zara and J. Crew, have started charging customers return fees over the past year. Others have shortened their return windows. Some shopping sites, like Canadian retailer Ssense, have threatened to kick frequent users off their platforms if they suspect abuse of their policies.

However, not all retailers view frequent customers the same way. These customers could be considered “good returns” if they buy – and keep – many more items than they return, Ali said.

“Often, your most profitable customers tend to be the ones who come back the most,” she said.