Holiday returns can carry hefty price

By Megan Woolhouse
Globe Staff / December 15, 2009

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Before unpacking that new netbook computer or digital camera this holiday season, make sure you really want to keep it. There could be a price to pay just for opening the box.

A state survey set to be released today shows that a growing number of retailers are imposing fees on returned goods, especially electronics, even if the product is not damaged. The charges, known as restocking fees, range from 10 to 60 percent, depending on the merchant.

The hefty return penalties are a surprise to many consumers, like Barbara Wallace of Boston, who bought a $549 laptop computer for her granddaughter at Best Buy in Dorchester yesterday. If her granddaughter decides to return the computer because it is not the one she wants, her grandmother could be out $80.

“They didn’t say anything to me about that,’’ Wallace said of the restocking charge. “I don’t like it.’’

Under state law, merchants must post return policies prominently. But Massachusetts, unlike some other states, does not regulate how much merchants can charge to deal with exchanges and returns.

Retailers defend restocking fees as a way to combat fraud. For example, they say, the charges discourage someone from buying a high-definition television to watch the Super Bowl and returning it the next day, expecting to get all their money back.

The survey of 39 Massachusetts merchants, conducted by the state office of Consumer Affairs and Business Regulation, found that nearly half are charging fees to handle returns. The fees apply to a range of products that are most frequently returned by consumers, including electronics, mattresses, appliances and cellphones.

Restocking fees are proliferating in Massachusetts, said Barbara Anthony, undersecretary of consumer affairs. “We think it’s important for consumers to know, particularly at this time of year when everybody’s buying for everybody else,’’ she said.

Anthony said consumers generally believe that a receipt entitles them to a full cash refund. In reality, she said, refund policies are set by individual businesses. The state’s review of merchants’ policies found that the typical restocking fee was between 10 and 25 percent.

At Best Buy’s Dorchester store, the return policy is displayed at cash registers, but at three registers yesterday the signs were mostly obscured by gift card displays. The company charges a 15 percent restocking fee on many electronics products and 25 percent for special orders and appliances. There is no fee for return of defective items.

Scott Morris, a Best Buy spokesman, said he would follow up to ensure that the store policy is visible to customers before they hand over their money. He also said that Best Buy puts a bright-colored seal on smaller electronic items, like cameras and laptops. It warns buyers that if the seal is broken after purchase, a return-surcharge could apply.

Target Corp. imposes a 15 percent restocking fee on digital cameras, portable DVD players, and other electronics goods if the item is returned with an open box. “I think it’s been in line with what other retailers are doing,’’ spokeswoman Sonja Pothen said.

Jon Hurst, president of the Retailers Association of Massachusetts, said one reason businesses charge fees for returns on electronics, rather than merchandise such as clothing, is because televisions and computers are big-ticket items that lose value quickly because the technology changes so rapidly.

“The merchant can’t sell it for the full value,’’ Hurst said.

Despite shoppers’ irritation with return fees, Hurst said, they are actually “proconsumer’’ as long as they are made clear to customers beforehand. Otherwise, all consumers end up footing the bill for return losses in the form of higher prices.

Some companies - including Wal-Mart Stores Inc., the world’s largest retailer - do not impose restocking fees. Wal-Mart could not immediately be reached yesterday for comment on its return policy.

Deirdre Cummings, legislative director at MassPIRG, a consumer advocacy group, said that a decade ago only a few stores charged a fee for some returns, as a way to cover their expenses. Now, she said, more businesses assess the fees and sometimes profit by calculating the charge based on a percentage of the purchase price.

“They’re making more money off the consumer than they have in the past,’’ she said.

The state survey found that online retailer had some of the highest restocking fees, charging as much as 50 percent on some returned books and opened DVDs.

But officials at disputed the finding. They said restocking fees may apply to goods it sells on behalf of third-party vendors, but that Amazon itself does not impose return charges.

Anthony said that if consumers believe that a store is not properly publicizing its return policy, they can complain to the state’s Consumer Affairs Office. She said her office may also forward a complaint to the attorney general for investigation.

“Consumers have to be trained, and they have to ask, ‘Do you have a restocking fee?’ ’’ Anthony said.

Keith Mills, who owns Esprit du Vin wine shop in Milton, learned about the fees the hard way. He bought his wife a cellphone that she decided to return, costing them $30.

“They’re horrible,’’ Mills said of the return charges while shopping with his wife in Dorchester yesterday.

“It made me realize I need to be more cognizant [of the fees] when I buy.’’

Megan Woolhouse can be reached at