CHRIS HELGREN/Reuters/
- FedEx is launching its own 'no-box, no-label' returns service in 2023, the company announced Monday.
- UPS and Amazon already offer versions of this service for some returns.
- "This is the bar now," a returns expert told Insider.
Starting next year, retailers will be able to partner with FedEx to allow consumers to bring their unwanted e-commerce orders to FedEx Office stores without a box or a shipping label.
Instead of printing a label, putting the unwanted item back in the box, taping it all up, and arranging a pickup or dropping it off, consumers will simply walk into a FedEx Office location, hand over the item, show a QR code provided by the seller, and walk away empty-handed.
FedEx is just the latest logistics player emphasizing the "no-box, no-label" return. UPS offers it for eligible items from participating retailers, and has been a drop-off option for Amazon returns for years. Amazon also lets consumers return items without packaging at Whole Foods, Kohl's stores, and some Staples locations.
The service is becoming table stakes in e-commerce, Tony Sciarrotta, president of the Reverse Logistics Association, told Insider. For one thing, printing labels — even free ones — at home is becoming less convenient as fewer people own printers, or go to offices that have one.
"You have to be at that bar or above. It's not just free returns — it's free returns without a box. Just drop it off without packaging," Sciarrotta said. "There's no doubt that consumers will love this simplicity."
FedEx launched a similar service in 2020 with returns startup Happy Returns, but today's announcement is its first self-built offering and an expansion of the program, according to the company. Happy Returns, a startup founded in 2015 and acquired by Paypal in 2021, pioneered this strategy with its "return bars" in malls and retail stores and offers "no-box, no-label" returns for dozens of brands like Levi's and Everlane.
No printer, no problem
Dropping the label and box requirements does necessitate some changes from logistics companies and retailers, but it can also offer new efficiencies.
Accepting items without a box allows returns to be consolidated at the dropoff point. At Whole Foods stores, for example, where Amazon returns can be dropped off, consumers may see an employee scan the item's barcode and a QR code from the consumer's phone, then drop the item into a large cardboard box containing other customer returns.
The big box of consolidated returns is often sent to a dedicated returns warehouse, where the lack of packaging for each item cuts down processing time.
FedEx's announcement indicates that this consolidation strategy makes returns service cheaper for retailers — a major concern since ever-growing returns take a growing bite out of retailers' bottom lines.
It's still up to retailers
Even though UPS and FedEx both offer a no-box, no-label returns option, retailers still have to sign on — so not all returns will be eligible for this service.
And though this simpler model is evolving into the industry standard, it's hardly universal, and it does have downsides.
First, Sciarrotta said, the more hassle-free returns become, the less likely it is that the reason for the return is being captured and actively considered. In a store, he said, employees can find out why an item is bring returned and direct the customer to another product that could mitigate the issue. A 30-second interaction at a counter is incredible efficient, but doesn't make an exchange or up-sale likely.
Second, easier returns can easily boost fraud without the proper controls in place, according to Sciarrotta. "Fraudulent returns are on the rise," he said. "There's no way for a Kohl's clerk, a UPS agent, or a FedEx agent to scan a QR code and know that what they're about to get is the right thing. You make it easier for people and they're going to take advantage of it."
Emma Cosgrove