Amazon’s business model is centered around efficiency and innovation. It prioritizes the customer, even at the cost of its employees—and its pseudo-employees. New reports suggest that Amazon’s retail partners are feeling the strain, such that the UPS Store, Whole Foods, Staples, and Kohl’s locations have reported significant problems due to their partnerships with Amazon.

These agreements mandate that the physical locations of these chains will accept returns from Amazon customers. They are responsible for scanning the returned products, assigning an individual code to each, and then labeling, bagging, and boxing the return for pickup. For customers who drop off one or two boxes every once in a while, it offers an appealing convenience. For those who bring in as many as 50 boxes, regularly, the stores instead serve like a dump, forced to receive thousands of added packages per week.

The combined results have prompted all four retailers to complain about untenable conditions, including congestion in their stores, increased labor costs, and excessive plastic waste. Staples workers circulated a petition, demanding that their employer increase their budgeted hours so that they could accommodate the added foot traffic.

But experts suggest other ways might be more effective, including incentives that might curb superfluous returns. For example, Amazon might offer more comprehensive product information about the items it sells. Or it might charge consumers to make returns, though this option flies directly in the face of its promise of convenience and likely would anger its loyal, frequent shoppers.

Yet some UPS Store locations have experimented with disincentives, charging $1 per return. Staples and Kohl’s have resisted such a policy thus far, as well as acknowledged the benefits that accepting returns brings, such as increased in-store purchases from shoppers already in the store. According to Amazon’s own announcements, it will ensure that at least one free return option will always be available to customers.

These conflicting interests suggest that the current model might not be able to last forever though. The National Retail Federation has reported that, as of 2022, 16.5 percent of all online purchases were returned. That rate continues to climb. True to its name, Amazon continues to account for a sizeable share of those return figures.

Discussion Questions 

1. What other steps can or should Amazon take to reduce the strain placed on its return partners?
2. Does it seem advisable for retailers to continue return partnerships with Amazon? Why or why not?

Sources: Caroline O’Donovan, “Returns of the ‘Amazombies’: Unwanted Packages Are a Retail Nightmare,” The Washington Post, July 21, 2024; Clara Ludmir, “The Billion Dollar Return Nightmare: Why Retailers Are Enabling ‘Keep It’ Policies,” Forbes, December 6, 2023; Mattea Vecera, “Retailers Like Staples Are Being Overrun with Customers Dropping Off Amazon Returns,” Inc., July 23, 2024