Once the happy glow of Christmas gifting has faded, it's time to head back to the mall to exchange what you got for what you actually want.
Returns are big business and they can cause big problems during the holiday season. Last year, the National Retail Federation's (NRF) annual Return Fraud Survey showed that retailers expected that 3.5% of their holiday returns would be fraudulent in the 2015 post-holiday season. That's up from 3% the previous year and it's a problem that retailers expected would cost them $2.2 billion in 2015.
"While technology has played a significant role in deterring many in-person fraudulent transactions that would have otherwise gone unseen, there is little that can be done to prevent a determined criminal who will find a loophole one way or another," said NRF Vice President of Loss Prevention Bob Moraca. "When it comes to retail fraud, retailers can build taller walls, but criminals continue to find taller ladders."
At least in part to deal with return problems and to attempt to keep people honest, a number of retailers have tightened their return policies for 2016. That may not stop determined criminals, but it may cause problems for regular folks looking to return or exchange an unwanted gift.
What are retailers doing?
A number of major retailers have decided to end open-ended return policies, putting specific windows on when people can bring things back, according to ConsumerWorld.org's annual return policy survey. In general, holiday return policies do account for items being bought in November and returned in January -- which may be a longer window than the chains allow the rest of the year -- but many retailers have put in definitive limits.
- Macy's, which formerly had a very liberal open-ended policy, now requires all returns be done in one year (still a generous policy).
- Kohl's has placed an end date of Jan. 31 for "premium electronics" instead of its previous open-ended policy.
- Costco's return period for major appliances is now 90 days. It used to be open-ended.
- A number of retailers have shortened the window to return drones including Target (NYSE:TGT) (14 days), Wal-Mart (NYSE:WMT) (15 days), and Toys "R" Us (30 days).
- Macy's also has a three-day return window for furniture and a 60-day period for mattresses.
- For most items, Wal-Mart has a 90-day policy (with electronics at 30 days and just 15 days for cameras, computers, and GPS units).
- Target has similar rules offering 90 days in general, but only 30 for electronics.
"It's surprising to me that these three big retailers put an end to their unlimited return policy for some or all categories of items," Edgar Dworsky, founder of ConsumerWorld.org told NBC News, referring to Macy's, Kohl's, and Costco. "How strict or lenient return policies are seems to be cyclical. We seem to be in a period of some tightening."
What should you do?
While some stores have tightened their policies and others have tweaked certain categories, in general it's still very easy to return your holiday gifts. To make sure that happens smoothly, make sure you have your receipt and that you head back to the store soon after the holiday has ended.
It's always best to have a receipt. If you don't, many stores will refund you only the lowest price the item has sold for recently and then sometimes only in store credit. In addition, if possible, you will want to return items unopened unless the item was found to be defective. In many cases, if that happens, consumers will have the right to have the gift replaced, repaired, or the cost refunded.
Returns are an unfortunate reality of the holiday season, but if you plan ahead and have all your documentation, the process should go smoothly. That, of course, may mean having to ask a family member for a receipt for a gift they thought was perfect, but you were less than thrilled with. That's never fun, but it's better than having to trot out a horrifying sweater or ghastly shirt every time your aunt visits to show her how much you loved her gift.
Daniel Kline has no position in any stocks mentioned. He has rarely returned a gift (not because they are all good; mostly because he does not like returning things). The Motley Fool owns shares of and recommends Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.