Free Shipping and Returns Could Be on Their Way Out. Here’s What That Means for Your Wallet

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Over 17% of online purchases are returned, which is a big headache for retailers. Find out how their changing policies might impact your online shopping. [[{“value”:”

I am a big fan of online shopping. There was a time when you had to trudge from store to store to find a bargain or get exactly the product you wanted. But these days, I can see what’s available in hundreds of different stores without even leaving my house. Even better? I can often get my shopping delivered and return anything that isn’t quite right. All for free.

Unfortunately, those perks cost retailers a lot of money, and now they’re tightening their belts. Since lots of us have converted to online shopping, stores don’t need to woo us with free shipping and generous return options.

The era of free shipping and returns could be coming to an end

Retailers aren’t pulling the plug on free shipping and returns completely. But they are moving the goalposts and encouraging consumers to change their online habits. Stores would prefer us to use services like curbside pickup, which costs them less and can be more convenient for consumers.

You may find you need to spend more or sign up for premium plans to get free shipping. For example, The Wall Street Journal reports that the average minimum order for free shipping rose from $52 in 2019 to $64 in 2023, per Narvar data. Return windows are getting smaller and some retailers will charge you for sending back certain items.

To give you an idea, here’s how free shipping and returns work with some popular retailers.

Amazon: Non-Prime customers need to spend at least $25 to qualify for free shipping. The retail giant has even been trialing a $35 minimum spend for some orders. Amazon Prime costs $14.99 a month or $139 per year.Target: Regular customers need to spend at least $35 to get free shipping with Target. To get free delivery with no minimum spend, customers need to use Target’s branded card or join its paid Target Circle 360 program.Zara: To get free delivery in two to four working days, you’ll need to spend $70 on non-sale items. You can return items for free by taking them to a store, but it’ll cost you $4.95 to send them back.H&M: H&M has a free loyalty program that gets members free shipping on orders over $40. Non-members need to spend at least $60 to get free delivery. In terms of online returns, members pay $2.99 and non-members pay $5.99.

What stricter shipping and return rules mean for your wallet

I’m going to go out on a limb here and say that I don’t think stricter returns or higher shipping fees are entirely a bad thing. According to the National Retail Federation, about $743 billion in merchandise was returned in 2023. The return rate for online purchases was 17.6%. Returns cost retailers a lot of money. And those costs will be passed on to customers in one way or another.

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I have read stories of shoppers buying hundreds of items only to return 99% of them. While I don’t want to pay high fees every time I ship an item, I also don’t want prices to rise because some people abuse the system. If tighter shipping and return policies mean we can reach a happy medium, so much the better.

With that in mind, here are some ways to adapt your habits to continue to enjoy the benefits of shopping online.

Don’t assume you’ll automatically be able to return an item for free. Check the store’s return policy before you make a purchase. See if you’ll have to pay to send items back and how long the return window is. It’s also good to see whether you’ll get a store credit instead of a full refund.Group your purchases until you reach order minimums. When you’re shopping online, there’s no time pressure. You can leave items in your cart for days, weeks, or even months while you build up a full order. Waiting until you’ve reached an order minimum can also help reduce impulse purchases.Weigh the benefits of premium services. Subscription costs can be a silent budget killer. You sign up for an introductory deal to get free shipping and before you know it, there’s $10 or $15 leaving your account every month. If you have four or five subscriptions, that can quickly add up to $600 or more every year. Think about each service you sign up for, and calculate what value you get from using them.Make the most of cash back rewards. Lots of the best cash back apps work with online retailers. Not only can you earn rewards, they’ll also help you find the best deals. Combine apps with credit card rewards to earn even more benefits.

Bottom line

Retailers aren’t getting rid of free shipping completely. Nor are they making it impossible to return items. However, they aren’t willing to swallow so much of the costs of sending and returning our online purchases anymore. As a consumer, this means we have to be more intentional about our online shopping. Pay attention to how policies are changing, so you don’t get caught unaware.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Emma Newbery has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Target. The Motley Fool has a disclosure policy.

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