Online Retailers Are Desperate to Stem a Surging Tide of Returns

Online sales are growing at about three times the rate of those from brick-and-mortar stores, in part because of the popularity of free shipping. But that’s led to a big problem: an explosion of online returns. Almost a third of web orders end up being sent back, vs. 9 percent of purchases at physical stores. The expense of processing and shipping boomeranged items can range from 20 percent to 65 percent of an e-tailer’s cost of goods sold, says United Parcel Service Inc. So web merchants are seeking ways to make returns less costly.

Amazon.com Inc. allows free returns to the lockers it’s installed in many areas. They’re often in locations that keep long hours, such as convenience stores or gyms. Consumers process the return online, pick an available locker location, and receive a code to open the locker door.