📦 Retailers don’t want your returns

Free returns are great, but know what’s even better? Free stuff.

Retailers like Amazon, Target, and Walmart have left customers pleasantly surprised by letting them keep refunded merchandise instead of returning it, per Business Insider.

Why are they doing this?

Free shipping has long been table stakes for consumers, but it turns out retailers don’t want to pay for shipping either, especially for an item coming back.

Due to the pandemic and global logistics challenges, the shipping burden has increasingly fallen on their shoulders:

1. Online returns rose 70% in 2020 as consumers were less willing to drive to stores for returns.
2. Retailers have been stuck with the bill for processing returned items (at a cost of $10-$20) and covering freight, which can run as high as 15%-20% of the cost of the products.

Before you go plotting your next big haul…

… there are some rules — not everything or everyone is eligible for freebies. The new return giveaway policy is restricted to customers who have a purchase history with the retailer, and items that qualify are typically:

• Unlikely to be resold
• Cheap enough that the cost for the retailer to process the return isn’t worth it

So if you had visions of copping a new flat-screen out of the deal, think more along the price point of fidget spinners.

And don’t go too crazy, or you may get banned from Amazon for filing too many returns.

Here’s a sentence that could have been written basically anytime since 1999: Gas prices are really high.

But this year it’s different. Like way too many things in 2021, it’s worse.

Per The Wall Street Journal, gas prices are up 50% YoY, the largest percentage jump in 10+ years.

Commiserate like it’s ‘08

Nationally, the average price for a gallon of regular is up to $3.39 from $2.27 a year ago. The record is $4, set in summer 2008.

Prices vary by state depending on local taxes, regulations, and energy infrastructure. Two stark examples:

• California, where the average price per gallon is $4.70
• Texas, where the average price per gallon is $2.98

When added to rising costs of groceries and other consumer staples, the jump is taking a toll on drivers (as well as on gas station owners) and putting pressure on producers to boost supply.

But it’s not that simple

While tapping into reserves could help lower prices, American producers have been slow to ramp production due to pressure from investors to limit environmental harm, creating a lose-lose situation:

• Boost production and risk criticism for environmental damage
• Hold firm and catch flak for rising prices

On the bright side, analysts believe electric vehicles will be cheaper to make than gas vehicles as early as 2027, which could make the concept of gas prices (and endless complaints about them) a thing of the past.

The overdraft fee.

It’s the bane of our existence.

While we hate it, US banks feast on the charge: The industry made an eye-watering $14B+ on overdraft in 2019 [insert unprintable words].

The practice may be coming to an end

On Wednesday, Capital One announced it will eliminate overdraft, per CNBC. The bank — which charges customers $25-$35 for conducting transactions that exceed their balance — makes $150m a year on the hated fee.

With ~350 physical locations and 70k ATMs, Capital One is the biggest US bank to ax overdraft. Moving forward, it will:

• Place customers who’ve paid overdraft into a fee-draft protection service next year
• Decline transactions for customers without overdraft protection

Overdraft fees have long been a point of contention

Earlier this year, a group of Democrat senators sent a letter to JPMorgan demanding that the bank return $1.5B in overdraft fees it made during COVID. JPMorgan’s CEO Jamie Dimon said “no.”

In what is probably not a coincidence, the Consumer Financial Protection Bureau (CFPB) said on Wednesday that it’s increasing oversight of banks that rely on overdraft.

Capital One’s move…

… could signal an industrywide change.

There is precedent for this: In 2019, brokerages (TD Ameritrade, Charles Schwab, Interactive Brokers) all got rid of trading commissions in quick succession so as to stay competitive.

If history repeated itself, then [insert fist pound].