What: The WSJ reports that Amazon and Walmart prefer refunding customers without returning products than getting them back.

Why it is important: another proof that e-commerce profitability formula is to be found.

E-commerce returns jumped in 2020 by 70%, and more than half of the increase was due to higher e-commerce sale (the Journal of Marketing Research already mentioned that free shipping and special operations usually led to an increase in returns, due to customers’ disappearance of guilt and responsibility). In December, an article from CBRE already pointed out that the cost of logistics due to return was to significantly increase.

According to experts, processing online returns can cost USD 10 to USD 20, which led Amazon and Walmart to favour refunds over physical returns of products. This has more consequences than just profitability: scammers took note and this leads to an increase of frauds.

Amazon, Walmart Tell Consumers to Skip Returns of Unwanted Items