Walmart to raise return rates for third-party e-commerce orders 

Walmart’s monthly announcement on its marketplace portal states that it has increased the return shipping rate for orders fulfilled by its third-party sellers. The increase took effect on March 20.

The retail giant noted “changing market conditions” for the rate increase. While the retailer does not make its return shipping rates public, the company said it’s the first rate increase in two years.

Walmart said its rates are among the lowest in the industry and the rates for orders shipped for e-commerce sellers through Walmart Fulfillment Services will not increase. The retailer said to avoid paying for return shipping rates. Sellers can add a “Keep It Rule” for unwanted returns. This allows customers to keep their items and still receive a refund when initiating returns online or inside Walmart stores.

The new “Keep It Rule” outlined on Walmart’s Marketplace portal is also part of a growing trend in retail. Amazon and other retailers began offering the “keep It” choice for some lower-priced items. Retailers keep track of the refund occurrences by customers and will restrict the refund if abuse or fraud is suspected.

A report from goTRG in 2023 found that 59% of U.S.-based retailers adopted “keep it” services for returns that are not economical to ship back.

Walmart is not the only retailer charging for returns as sellers try to minimize reverse logistics expenses. Amazon and other retailers with easy return policies have prompted more consumers to overbuy with the belief they can return unwanted items for a complete refund. But return logistics don’t come free.

Blue Yonder recently surveyed retailers about e-commerce returns and found that 89% had instituted higher restocking and shipping fees and shortened return windows in the past year. Blue Yonder also reported despite higher restrictions, 59% of retailers experienced an increase in online returns which cut into their margins.

Retailers are making changes to return policies to help control increasing costs and recoup a portion of the expenses via customer fees. The reverse journey of a returned order incurs many costs related to shipping and transportation, processing, restocking and customer service, Blue Yonder reports.

Adobe Analytics projected U.S. online returns would top $221 billion in 2023 and account for 20% to 30% of total online sales. The National Retail Federation projections for brick-and-mortar shopping returns were 13% of total sales in 2023.