Amazon will allow returns using lockers
The move adds convenience for urban customers -- and aims to trim the billions of dollars the e-commerce giant spends on packing and shipping each year.
By Greg Bensinger, The Wall Street Journal
Amazon.com (AMZN) has quietly rolled out a new service to let customers return unwanted merchandise using large metal lockers it has installed for deliveries in garages, convenience and grocery stores in major metropolitan areas.
The service will help address a problem that has plagued Amazon and other e-commerce retailers. As much as a third of all online purchases are eventually returned, by some estimates, making it costly for merchants that in some cases pay for shipping in both directions.
Packaging and shipping orders is a major expense for Amazon. The company has been on a warehouse building frenzy in recent years, constructing facilities close to urban centers to speed delivery times. Amazon spent $8.59 billion on order fulfillment in 2013, up from $6.42 billion a year earlier.
Amazon has been installing the lockers in public places over the past several years, giving urban dwellers a way to ensure their packages can be delivered even when they are at work. Amazon puts the packages in one of a few cabinets in a locker and sends the customer a code to open it, usually giving them two or three days to do so.
Similarly, for returns Amazon sends a code to open a specific cabinet in a locker where customers can leave their merchandise for UPS or other carriers to retrieve. The service presumably will save Amazon some costs because the carriers will already be visiting locker sites for drop-offs.
Nonetheless, Amazon appears to be charging the same rate for returns through lockers as for drop-offs at UPS sites. Consumers have one business day to drop off their packages, which must be no larger than one cubic foot to fit in a locker, according to Amazon's website.
"Customers like the added convenience" of returns through the lockers, said an Amazon spokeswoman.
While Amazon has been expanding its locker program, rival Google (GOOG) is scaling its own back. After acquiring BufferBox, a Canadian company with similar lockers, in late 2012, Google earlier this year announced that it would shut down the service.
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