H&M considers charging customers for making returns amid excess inventories

Yahoo Finance hosts check out the latest online return policy from fast-fashion retailer H&M.

Video transcript

SEANA SMITH: Well, one place your child may want to spend their allowance is H&M. The retailer considering charging customers, though, for making returns. The fast fashion retailer pointing to rising costs, excess inventory, as a reason for this as a possible of the policy changes. Of course, customers wouldn't be happy about this. But the other option they're weighing is giving shoppers their money back and allowing them to keep the clothes. This is an interesting, I guess, option here.

Rachelle, it's important to point out that this doesn't apply to all purchases. So if you buy something online, you return it in stores, you're not going to be charged. If you buy it online and return it online, that's where you're going to be charged. But certainly, this is something that I don't think H&M shoppers are going to be too excited about.

RACHELLE AKUFFO: No, I mean, when you think of the barriers to you hitting Buy, when you look for things like free shipping, like, you're looking for the free perks. If you know in advance that you might be charged a return fee, that's incredibly offputting. And it's not as if, you know, H&M is like a massive designer brand where people might wear something once and return it. You know, it's fast fashion. So I don't like this idea of charging these fees. But as you said, it's for certain categories and in certain situations, but I'm not a fan of it. Dave, what about you?

DAVE BRIGGS: Well, I'm just curious how transparent they'll be when you do make those purchases. If it's blaring at you on the website when you make a purchase, I guess I could be OK with it. Now, they are only testing this out in certain markets. And they're awaiting feedback from customers, which we all assume will be overwhelmingly--

SEANA SMITH: Terrible.

DAVE BRIGGS: --negative. So it sounds like something they could squash. But according to one report, they also will waive that if you are a loyalty member, which makes a lot of sense. All these companies are about getting more members into those loyalty programs. So I think if that's the case, hard to argue. The prices aren't that high. Bottom line here, it's holiday season, and most of those gifts are purchased online, and you don't know if they're going to fit. And that's when this will backfire.

SEANA SMITH: It certainly will backfire, although maybe it will make you think twice before you go in and make some of those impulse purchases because you're right, H&M isn't that expensive, compared to some of its competitors out there. It does have more affordable clothes, so maybe you won't go as crazy as maybe you initially would have. And that could be good news, too.

DAVE BRIGGS: It'll be interesting to see if they can clear some of that inventory that everyone's dealing with.