What is a RESTOCKING FEE?
The restocking fee is the amount that is charged by the seller for the acceptance of any merchandise that is being returned for a refund. (Blacks Law Dictionary)
Are retail sellers in the United States required by law to accept returns?
No. In the United States there is no requirement or law that says that sellers must accept returns.
In addition, it is perfectly legal, acceptable, and customary for a retailer that DOES accept returns to charge a restocking fee.
The retailer might not charge a restocking fee if the customer is exchanging the item for something else but might charge a restocking fee if the customer wants a cash refund.
In some locations and instances in the US, it is required that a seller conspicuously post or require that a buyer read the return policies before the buyer can place an order.
Why do retailers charge a restocking fee?
Retailers charge a restocking fee when someone returns an item and wants a cash refund for several reasons all related to the seller trying to recover part of the costs of a sale that has been reversed.
What is a customary restocking fee?
If a retailer accepts returns and the customer receives a return authorization from the seller, the restocking fees usually range from 10-30% depending on the circumstances.
If a customer does not follow a retailers return policies, there may be no refund at all.
To give you an idea of how various internet business use restocking fees:
What about Horsekeeping?
Horsekeeping LLC has a policy page that is posted on the website. Every buyer must check that they have read and accept the policies before they can complete a purchase.
Our return policy is YES ((except for a short list of non-returnable items)) we DO accept returns within 7 days of your receipt of an item. If you dont like something or it doesnt fit, you can return it for its FULL ITEM VALUE in an exchange for something of equal or greater value the exchange must take place within one week from our receipt of the return.
However, if you are not going to exchange, but want a cash refund, then the moderate restocking fee of 15% will be deducted from your refund.
This restocking fee covers:
Some people say that the costs associated with returns should just be absorbed by the seller as they are just the cost of doing business.
Well, it wouldnt take too many returns for a seller to feel the need to raise prices across the board on items or shipping and handling.
Here at Horsekeeping LLC, we would rather keep our item prices fair and charge reasonable shipping and handling fees. It wouldnt make sense for us to penalize the majority of our customers by raising prices or fees to cover the costs of returns by a few. Instead, we feel the responsible approach is to have the very few customers that want to return things pay the appropriate restocking fees.
Returns are costly for a seller. Read my previous blog post which has some interesting examples: