Rise of the return fee
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What is the main topic discussed in this episode?
Thank you. Thank you. According to the National Retail Federation, 72% will do so this holiday. Marketplace's Henry Epp explains why.
With online shopping, we've gotten pretty used to the idea that you can return stuff for free. And because of that, a lot of shoppers do this thing called bracketing, says Edgar Dworsky, founder of ConsumerWorld.org.
They will get, let's say, pants, three different sizes and colors of pants, not knowing which one they're going to want to keep. They'll keep one item and return the other two.
Nice for the customer, but for the retailer, those returns add up.
The postage costs a lot of money. The processing of those returns costs money. So you begin to see some companies saying, enough.
And they're slapping a fee on returns, especially returns by mail, Dvorsky says. The risk for companies is that customers don't like being charged fees, says David Sobey, CEO of the logistics company Happy Returns. It may turn shoppers off altogether and have them say, gosh, you know, I'm just not willing to buy from this merchant anymore. One way around this, returning things to a physical store rather than through the mail. That's usually free, Sobey says. It's also cheaper for the retailer, and shoppers might be tempted to buy something else while they're in the store. I'm Henry Epp for Marketplace.
Precious metals are having a moment. New record spot prices today for gold, silver and platinum. This is in part because investors are looking ahead to next year and possible interest rate moves at the Federal Reserve. Uncertainty also tends to lift gold prices, which are on track for their biggest annual increase since 1979. A couple of months ago, more than 5 million shoppers embraced the We Ain't Buying It campaign. That's a boycott of three major retailers, Amazon, Home Depot, and Target. Usually when we talk boycotts, the focus is on their effect on a company's bottom line. But there's also an impact on shoppers. Rima Kreis, host of Marketplace's podcast, This is Uncomfortable, takes a look at that aspect of the story.
Why are retailers starting to charge return fees for online orders?
When I walk the streets of Portland, Oregon, asking people about boycotts, most people mentioned at least one company they've been trying to avoid.
McDonald's. Target. Pretty good about keeping off Amazon.
How does 'bracketing' by shoppers drive up retailers' return costs?
Chick-fil-A and Hobby Lobby.
I'm definitely avoiding Starbucks.
Why are you boycotting these things? Because I don't... like the way that they use their money to influence our politics. I don't support their business practices.
Because they're expensive. But I also heard people say, I want to boycott, but... Sometimes I feel like if only I'm contributing to it, then what change will happen? But I guess that's a sheep mentality.
Financial therapist Lindsay Bryan-Podvin says she's been hearing similar things from her clients lately. Lots of second guessing.
This anxiety around how do I boycott the right way? How do I do it right? How do I not mess up?
Brian Podvin says consumer boycotts can tap into our underlying anxieties.
This fear of doing it wrong is not just a boycott thing, it is a personal finance thing.
Boycotts can intensify that feeling of self-doubt, she says, because they turn everyday purchases into moral decisions, which can lead to decision fatigue.
Like, what do I do if the only diapers I can buy that don't give my baby a rash come from Target? And I'm trying to avoid it, but I can't put my child in something that they have a reaction to.
What are the financial and operational reasons retailers cite for charging return fees?
Brian Podvin tells her clients, if it's important to you, just do what you can with the time, money and access that you have. Where people tend to get stuck, she says, is when guilt turns into shame.
guilt and shame are different. Guilt is external. I did something bad. I made a mistake. Shame is internal. I'm bad. I'm not good at this. I don't understand.
She says part of what makes boycotts so stressful is that they ask individuals to carry responsibility for solving problems that are actually systemic. But she also says participating in them can have real psychological upsides.
When you have the opportunity to move your dollars in a way that feels better to you and spend and save and invest in alignment with your values, generally then you can just feel better about the way that you're using your dollars.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:01–2:21
2
Why are retailers starting to charge return fees for online orders?
2:21–2:33
3
How does 'bracketing' by shoppers drive up retailers' return costs?
2:33–3:48
4
What are the financial and operational reasons retailers cite for charging return fees?
3:48–6:46