This Popular Clothing Chain Is Charging Shoppers for Returns to Cut Costs

The policy will soon be tested out in specific markets, the retailer said.

Anyone who likes to shop knows that returns can be a real pain in the neck. And with the rise of online shopping—meaning you often don't get to try stuff on before it you buy it—returns have become that much more prevalent. Big-name retailers like Amazon and glasses company Warby Parker have introduced "try before you buy," which allows you to test out and see merchandise before you commit to buying, while retailers like Macy's and Nordstrom require you to make a purchase first, but offer returns free of charge. Now, some retailers are taking a different approach, including charging you to return products in order to cut overhead costs. Read on to find out which popular clothing chain will make you shell out for returns.

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The retail industry continues to struggle.

Even though it seems like we're finally seeing a bit of relief from the pandemic, some economic sectors are still struggling. One key player is the retail industry, and according to Retail Dive, several companies are on the brink of bankruptcy. Bed Bath & Beyond has been making waves recently, having announced the closure of 150 stores due to ongoing financial woes.

Brands in the apparel sector aren't safe either. According to CreditRisk Monitor's FRISK scores, big names like Express and The RealReal have between a 9.99 and 50 percent chance of filing for bankruptcy, and Abercrombie & Fitch, Stitch Fix, ThredUp, Land's End, and Torrid are among those with a 4 to 9.99 percent chance of bankruptcy, Retail Dive reported.

One popular clothing chain didn't make the list—but they're still taking steps to mitigate financial pressures.

You might get a new charge at this popular clothing retailer.

shopper carrying H&M bag
Sara Sette / Shutterstock

If you like to shop at affordable retailer H&M, you'll want to think before you buy that top or blazer on a whim. According to a transcript of a Sept. 29 earnings call, they retailer has plans to start charging for returns.

"We are about to test return fees in a few of the markets to see the response from the customers," H&M CEO Helena Helmersson said on the call. "It all depends on how it's received by the customer. So that's why we do a test to see if that is something to fast track."

Helmersson noted that this process "will take some time" to roll out, and there is no precise time limit for the test. Currently, H&M's website still states that returns are free.

"Let's see when we see the evaluation of the tests, whether this is the most impactful thing to do or not," Helmersson said.

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H&M did not make it clear which markets would be tested.

h&m store
Sara Sette / Shu

While Helmersson noted that the test would affect a few markets, she didn't specify which markets those would be, nor how much the return fee would be. In an emailed comment to CNN Business, however, H&M confirmed that the fees "will only apply to online returns," and if you bring your online order back to a store, "there is no fee."

The new policy is thanks in large part to the "wind down" of business in Russia, the stronger U.S. dollar, and higher prices for raw material and energy, Helmersson noted on the call, adding that this is "only one initiative to improve the situation."

The company will also reconsider how it purchases services and how it sets up business in terms of offices and travel, H&M CFO Adam Karlsson added on the call.

H&M isn't alone in this initiative.

While many retailers offer free returns as a perk, there are others that don't, meaning you'll want to check policies before you buy. Kohl's no longer covers the cost of returns sent by mail, per FootWearNews, and JCPenney will take an $8 deduction from refunds when returns are shipped back. Some retailers will comp the return fee only if you're part of a special rewards program, including DSW; if you're a Gold or Elite member, your returns are free to ship back, but general shoppers will be charged $8.50.

Another fast fashion brand, Zara, also recently implemented a fee to return online purchases, Retail Dive reported in June. The policy was already in effect in European countries where Zara has a presence, then introduced in the U.K. and the U.S.

The charge only applies when customers bring their returns to third-party drop-off points, as opposed to an actual Zara store. According to Zara's website, there is a $3.95 charge deducted from your refunded amount when you go to these drop points.

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