FedEx to Launch ‘Consolidated Returns’ for E-commerce

The shipping giant says it’ll be cheaper for merchants, easier for the consumer and potentially better for the environment.
FedEx boxes on a conveyor belt.
  • FedEx is launching a consolidated return service for e-commerce returns.
  • Consumers who want to return a product can bring the item to a FedEx Office store, and they don’t need a box or a shipping label.
  • The shipping giant says it’ll be cheaper for merchants, easier for the consumer and potentially better for the environment. 

FedEx next year will launch a service it’s calling “FedEx Consolidated Returns” that it says will help it lower costs for merchants. 

According to a Dec. 12 release, the retailer said it will launch the new service early in 2023. FedEx said the service is powered through supply chain services offered by FedEx Logistics and FedEx Office locations. Consumers who make a purchase from participating retailers can return the unwanted product to FedEx Office locations (there are around 2,000) without any box or label. 

The returned items will be consolidated with other returns from a variety of merchants to save materials and space, the release said. Then, the items will be processed by FedEx Logistics and returned to retailers through its less-than-truckload (LTL) options. According to FedEx, a LTL shipment consists of goods that weigh more than over150 pounds but require just a portion of trailer space. LTL shipments are more economical than other shipping options because they’re viewed as less urgent.

“As the returns market grows, FedEx continues to explore innovative alternatives for our customers,” said Ryan Kelly, vice president of e-commerce and retail marketing at FedEx Services, in the release. “While this solution will provide a low-priced returns option for merchants, it’s also a simple, convenient process to help retailers deliver a shopper-friendly experience.” 

FedEx is calling the new process simple for consumers because they won’t need a box or a label to return a good. Instead, they’ll initiate the process using a QR code, the release said. The shipping giant also says the new consolidated return process could create environmental benefits by reducing carbon emissions when compared to a single prepackaged return, as multiple items are consolidated into one box before they’re sent to the returns processing center.

A survey by the National Retail Federation and Appriss Retail published earlier this year found retailers expected more than $761 billion in goods sold in 2021 would be returned by customers — that accounts for about 16.6% of all retail sales in 2021, per the survey. For every $1 billion in sales, a retailer spends about $166 million on returns.

Some retailers, like Zara and H&M, are experimenting with charging customers to return some items to offset the costs associated with returns. Other retailers like JCPenney, Abercrombie & Fitch and J.Crew also impose a fee on returns, Insider reported. Shoe retailer DSW charges for returns unless shoppers are part of the highest tier of its loyalty rewards program, according to the report.

The concept for consumers is not entirely new. Amazon customers can bring their returns unboxed and unlabeled to a UPS store to return them. Shoppers can also have UPS pick the item up from their house, though those items need to be boxed, according to CNET.