Amazon and other retailers are using algorithms to determine if it makes economic sense to process a customer's return or let them keep the product. The concept has been utilized more often during the pandemic as e-commerce sales continue to skyrocket.
- Most of the online purchases deemed not worthy of returning are smaller and less expensive items. The number of e-commerce packages returned in 2020 grew 70% over 2019. Depending on the item, processing such returns can run between $10 and $20, not including freight.
- For retailers, it's significantly cheaper for customers to return items in a physical store. Amazon, Walmart, and others also allow customers to schedule times for delivery partners like FedEx to pick up returns at their homes.
- Amazon customer Jan Edmiston, for example, was refunded for a book she mistakenly ordered and didn't have to return it. “How much money is Amazon making to be able to absorb these mistakes?” she asked.
- About 25% of dark-web discussions about return fraud have focused on Amazon. The company's algorithms are more likely to flag possible fraud among newly opened, rather than older, accounts.