The complex, challenging, expensive process required for retailers to accept returns is well-established. It is especially difficult for companies with liberal return policies, such as Amazon, and it appears to be the impetus for Amazon’s recent policy change. In announcing the notion of returnless refunds (also referred to as returnless returns), Amazon has indicated that it will allow customers to keep a product that they are dissatisfied with but refund the price, without any action (e.g., packaging and shipping the product back) required by those customers.

For consumers, this change promises remarkable benefits. They gain convenience, a satisfaction guarantee, and likely a more positive view of Amazon. For the retailer, it eliminates the hassle and cost of processing returns, which can be more expensive than the cost of the product itself, especially for inexpensive items. Notably, the policy appears to apply automatically only to relatively low-cost products.

In a recent study aimed at understanding the psychological implications of returnless refunds for consumers, researchers affirmed that eliminating the hassle of a return improved customers’ favorable views of the retailer. In more detailed findings, they note that the way a returnless refund is offered is nearly as important as it being offered at all. Specifically, the researchers offered half of the participants in one of their studies a returnless refund for a damaged product automatically. The other half had to send in proof of the damage before receiving the credit. Both groups indicated that they could complete the refund process easily, but the added level of automatic trust prompted the first group to express more favorable opinions of the retail brand offering the easy refund.

In another study, these researchers told participants that they had received fruit that was past its sell-by date. All of them were offered a returnless refund. But one set of respondents read that the offer was for their benefit, while another set read that it reflected the company’s attempt to save money. As might come as no surprise, the former group reacted much more favorably than the latter group. Another set of respondents, told that the policy was for the sake of the environment, provided reactions somewhere in between these two extremes. Such responsibility appeals may be effective though; in yet another study reported by the same researchers, granting a returnless refund for a shirt was viewed more favorably when it was coupled with a suggestion to donate the clothing, instead of throwing it away.

In parallel with these research insights, increasing numbers of retailers are testing their own practical applications of returnless refunds. Walmart opted in quietly, offering the option for a range of inexpensive products. Costco, Target, Home Depot, Shein, and Temu also have integrated the policy into their logistics, to varying extents and for specific purchase situations. Coming back to Amazon, it recently expanded its program to include third-party sellers, encouraging them to offer returnless refunds on items priced less than $75.

Despite such widespread support though, the policy clearly creates a greater risk of opportunistic behaviors by consumers. Amazon alone reported a 144 percent increase in fraudulent returns between 2023 and 2024. To minimize this risk, most companies that have adopted returnless refunds have remained quiet about exactly how, when, and under what conditions the system gets applied. They also rely on strong monitoring efforts, to identify opportunists and quickly ban them from returning any more items.

Discussion Questions

1. Perform a cost–benefit analysis of returnless refunds. What are the main costs for retailers, and what are the main benefits?
2. What additional safety features might be added, to make it harder for potential thieves to take advantage of lenient return policies?

Sources: Lisa Ward, “Why ‘Returnless Returns’ Can Pay Off for Companies,” The Wall Street Journal, July 24, 2025; John P. Costello and Christopher J. Bechler, “Just Keep It: When and Why Returnless Product Returns Foster Brand Support,” Journal of Marketing Research 63, no. 1 (2026), 191-209; Rebekah Harding, “Walmart and Amazon Are Changing Their Return Policies. Will This Change the Way You Buy?,” The Daily Dot, May 5, 2025; Sara Roth, Mike Brookbank, “More Retailers Offering ‘Returnless Refunds’,” News 5 Cleveland WEWS, February 5, 2025.