"The flood of returns swells in the period after the holidays as people send back unwanted gifts. Returns-services provider Optoro projects U.S. consumers this year will return $173 billion of goods between Thanksgiving and the end of January.
With the added shipping, warehousing and labor costs, Inmar estimates it costs merchants about $27 to handle a return for a $100 online order. Gartner’s Enright said companies lose some 50% of their margin on returns when accounting for the cost of initially selling the item plus processing the return."
"Reverse-logistics company Pollen Returns estimates about 30% of all returned items are resold. Things that do make it back to shelves are often discounted because they are no longer in season.
Retailers for the past decade have absorbed those costs, believing generous returns policies help attract customers and increase sales. But now the volume of returns has grown “to a point where everyone’s starting to take notice,” Enright said."
Probably true but typical that some have not. No one expects politicians (either party) to catch on to that as fast as eBay and Amazon did with their fees!
Yeah I used to charge double - triple the actual cost of shipping and reduce the product price by an equivalent amount on ebay until they changed the policy.
Our UPS as an Amazon “do it yourself” return center now. You scan the code, get a label, get a clear plastic bag, throw it in a box, print your receipt and done…I see so much potential fraud with this…
It’s a possibility since I actually don’t see any security cameras at my UPS Store and I was just there picking up my last inventory shipment of the year an hour ago.
I’ll have to take a better look next week when box #1 of the new year comes in!
I don’t think fraud’s really a concern. Realistically the majority of returned items end up in a landfill, or sold for pennies on the dollar on a pallet.
Reducing return processing costs >>> any losses incurred from cutting corners on processing returns.
Even if there are any in mine, they would not possible see me throwing an empty bag in the box and taking my item back with me. Nor could they know what I came with and leave with or why I may leave with some of it again. lastly, they actually really don’t seem to care at all what anyone does at that counter, I could EASILY pull other return out and take them with me…
To be fair, we should recognize that what is taxed, and what is not, has a marked tendency to change over time* - quite demonstrably, especially-so on a State-by-State basis - so what one experiences in this or that locale is never guaranteed to be reproducible at a future time - much less in another locale.
In general regards to various services being taxable, it cannot be denied that there’s been a sea-change on that front during our present century, hither and yon; in specific regards to shipping services (and/or its sinews, shipping supplies) being taxable, it equally cannot be gainsaid that’s there’s been a sea-change on that front since the Wayfair decision changed the landscape, and opened up new loopholes bound to be exploited.
This and that Tax Code IS - always has been, always will be - the politician’s friend, often enough in ways that aren’t necessarilyclear to the casual observer on most-any first blush take…
Remember when Amazon didn’t collect sales tax and left it up to 3P sellers to do it (and none did of course)?
I remember looking into that and the cost/work of doing so was prohibitive (50 states, all with different rules). I just assumed that 1) states are unlikely to pursue small time sellers, and would just find a way to compel the marketplace to collect taxes (which did end up happening) and 2) if I ever did receive assessments from some states for failure to collect sales taxes, the cost of paying those out of pocket would be cheaper than complying to begin with. (no assessments were ever received)
Also, collecting taxes and failing to remit them to the state can land you in jail, failure to collect them to begin with will not.
Pursuing small businesses for sales tax makes no sense in any way. Financially, the cost of figuring out what someone owes and then collecting a debt that’s a few hundred dollars would be a net loss for the tax department, and politically that would piss people off that they’re harassing small businesses for something that’s not really their fault.
I only have one location, so one ‘nexus’ for sales tax. I was only required to collect for my state. All the FBA sellers had other problems that some did not understand with warehouse locations, etc.
What MOST buyers (and a lot of sellers) did not understand was that the BUYER was responsible for paying the sales/use tax to their state. EVERY state that has a sales/use tax has either a line on the state tax form or a separate form entirely for remitting the tax due on out of state purchases.
The culmination of all the buyers NOT paying the taxes on those purchases was what we have now.
What is shocking to me is that I have not seen a single situation where a state actually took the time and computer power to check the records of what Amazon and all the other sites send them against previous tax filings for individuals.
With just a little effort they could go back and collect back taxes, penalties, and, possibly get some tax fraud charges for people that had not reported lots of out of state purchases.
For my own sites, if a state wants to know who has bought anything (I only collect for my state) all they have to do is ask. I’m not going to get into a legal battle trying to ‘protect’ any buyers that fail to pay up. The states COULD/SHOULD have been collecting and comparing all that information for years but couldn’t be bothered to do so.
There were a lot of states claiming that using FBA made you have “nexus” in all states with FBA warehouses that you have inventory in (which would be all of them the way amazon splits things up).
When I figured out how much work it would be to comply with that, it was a no-go.
States collecting from buyers is also pretty much a no go for the financial reason stated earlier, the only real option, which they ended up doing, is forcing Amazon to do it.
I suspect return liquidations are counted in the (dismal) 30% figure cited above.
Agree. Seems like it would be easy to set up an aisle of (not obviously defective) Amazon returns. Sold as-is, limited quantities, no returns…but perhaps that might then make Kohl’s liable for any product issues, and add to Amazon’s liability, so maybe that’s why they don’t.
And you would be surprised at the number of people that report an actual amount on that line. Most of those I have encountered are from eastern coast/new england area
