How Consumers Feel About "Keep the Item" Return Policies

There’s a return practice that’s been quietly simmering in the retail world for years. It’s called “refund without return” or simply “keep the item.” At first glance, it seems like a customer satisfaction win—after all, who doesn’t like free stuff? But sentiment isn’t as straightforward as you might expect. Customers’ reactions to this practice often hinge on their prior relationship with the retailer and how the policy is communicated.

What are “keep the Item” return policies? 

As the name suggests, “keep the item” means a retailer processes a refund for a return but tells the customer to keep or discard the item rather than shipping it back. It’s surprisingly common—75% of shoppers report experiencing this at least once, most frequently from brands like Amazon, Walmart, Target, Wayfair, Chewy, Kohl’s, and Shein.

The benefits of “keep the item” return policies

For many retailers, the logistics of handling returns—particularly for low-value or seasonal items—can be more costly than beneficial. Between shipping expenses, warehousing, product inspection, and restocking, the overhead often outweighs the item's resale potential. And that’s before factoring in the environmental impact of return shipping.

That’s why more retailers are strategically adopting “keep the item” return policies for certain scenarios. While this might seem counterintuitive, it’s a powerful lever for both revenue retention and operational efficiency.

By offering “keep the item” as a resolution, retailers:

• Retain revenue by protecting customer relationships—shortening resolution time, building trust, and increasing the likelihood of future purchases.
  
  
• Boost operational efficiency by eliminating the need for reverse logistics, saving time, labor, and costs tied to item processing. 

In an era where a poor return experience can cost a brand a lifetime customer, simplifying the process with flexible policies like “keep the item” can be a strategic advantage. It’s not just about minimizing losses—it’s about maximizing long-term value and delivering a post-purchase experience that keeps customers coming back.

When does “keep the item” make sense?

Typically, when shipping and handling costs exceed the item’s value. That threshold can be surprisingly low, especially with shipping fees starting around $5–7 and labor costs on the rise. In our recent study, 59% of “keep the item” refunds fell under $20, but nearly 20% were for items over $50, showing that brands are considering both cost and customer loyalty when making these decisions.

Consumer sentiment towards “keep the item” return policies 

Overall, customers have mixed feelings—especially those unfamiliar with the practice. While 65% appreciate the time saved, 13% feel burdened by having to figure out what to do with the unwanted product. Interestingly, 90% of customers who received a “keep the item” offer had previously shopped with that retailer—suggesting this strategy may work best when used to recognize and reward existing relationships.

More than half (53%) of all shoppers worry about potential abuse of the policy, though only 5% admit they’d take advantage of it themselves. This further underscores the importance of using data and intelligence—like Narvar’s IRIS™—to identify bad actors from loyal customers and customize the experience accordingly.

Best practices for using “keep the item” policies

Rather than a one-size-fits-all policy, “keep the item” works best when tailored. Use it selectively for VIPs and repeat customers, and always communicate the why. Whether it’s cost, sustainability, or a gesture of goodwill, transparency builds trust.

A great example: Chewy. When pet food arrives damaged, they don’t ask for it back—they suggest donating it to a local animal shelter. That kind of thoughtful messaging not only resolves the issue but fosters a deeper emotional connection.

The final word

Ultimately, every return—whether processed traditionally or via a “keep the item” policy—is an opportunity to retain revenue, preserve operational resources, and build long-term loyalty. What matters most isn’t just the decision itself, but how it’s communicated.

Retailers who get this right will approach return resolution strategically in order to optimize their post-purchase experience and foster customer loyalty.