Dive Brief:
- Walmart has increased return shipping rates for orders fulfilled by its third-party sellers due to "changing market conditions," the retailer announced in its March "Seller Digest."
- The company doesn't share seller-fulfilled return shipping rates publicly, but the increases that took effect March 20 are nominal, spokesperson John Forrest Ales said in an email to Supply Chain Dive. It's the first increase in return rates in two years.
- "Walmart’s rates are among the lowest in the industry, and we proudly offer a range of low-cost end-to-end fulfillment solutions for sellers of all sizes," Ales said. Rates for orders shipped via Walmart Fulfillment Services, the company's fulfillment offering for e-commerce sellers, remain unchanged.
Dive Insight:
Walmart has bumped up return shipping rates for seller-fulfilled orders as businesses try to strike the right balance between consumer-friendly returns policies and minimizing reverse logistics costs. Some are charging returns fees or toughening up their policies in other ways.
Crafting an effective returns strategy is a particularly pressing challenge for online sellers. The National Retail Federation and Appriss Retail projected in December that online returns in the U.S. retail industry would reach $247 billion worth of merchandise in 2023, or 17.6% of total online sales. That's a larger share than what was projected for brick-and-mortar shopping, with in-store returns worth 13.3% of total in-store sales.
Sellers on Walmart Marketplace, the retailer's e-commerce platform, can add a "Keep It Rule" to avoid paying for return shipping, per the March "Seller Digest." The rule allows customers to keep their items and receive a full refund.
"Sometimes it’s more cost-effective for Marketplace sellers to let customers keep an item and process the refund than it is to pay a return shipping fee," according to Walmart's Seller Help page on the rule.
"Keep it" policies are appealing for retailers selling low-cost items, as the expenses of shipping and processing often surpass the product's worth, according to a 2023 report from goTRG, a returns management solutions provider. The report said 59% of the over 500 U.S.-based retailers it surveyed have adopted "keep it" services for returns that aren't economical to ship back.
