The Hidden Costs of Restocking Fees

You may have seen the ads, "Try it for 30 days and return it for a full refund." or "We'll refund your money if you are not completely satisfied."

These are powerful messages used to lure consumers into buying a product on impulse. But what should consumers watch out for when buying something they are not sure they want to keep? One answer is - restocking fees.

What Are Restocking Fees?

Restocking fees are what retailers may charge if you decide to return an item. The amount can range from one to over 50 percent of the full retail price of the item.

In the past, mostly electronic and computer stores participated in the practice because the item, once opened, can no longer be sold as new. Now a variety of retailers have decided this is one way to offset the cost of returns. Many mattress companies, furniture stores, automobile dealerships, and even your local Target participate in the practice of charging restocking fees.

How Much Can Restocking Cost?

Take for example, Best Buy's current restocking policy which states:

"A restocking fee of 15% will be charged on opened notebook computers, projectors, camcorders, digital cameras, radar detectors, GPS/navigation and in-car video systems unless defective or prohibited by law. A restocking fee of 25% will be charged on Special Order Products, including appliances unless defective or prohibited by law."

In other words, if you wish to return a notebook computer that you opened and tried but did not like and it cost $600, Best Buy has the right to deduct $90 from the amount of the refund.

Avoiding Restocking Fees

Know the Store's Policy
Most states have laws stating that policies regarding restocking fees must be posted within eyeshot of the shoppers. If you do not see a policy sign posted, ask to speak directly with a Manager and have them explain the policy and then ask for a copy for your records.

Keep all Accessories, Manuals and Packaging Intact
The best scenario when you do not want a product is to know it before you tamper with the packaging, however if you do open the box keep everything down to the little baggies with the batteries.

Open Packages Carefully
Packaging is expensive for retailers to replace and if you do not have all of it or if it has been ripped in half, you could be charged when you make a return. The better the box looks when you go to return the item, the better chance you have of not being charged a fee.

Buy Gift Certificates
If you are buying a present and you are not sure what to buy, a gift certificate could be a better choice.

Know Your State's Laws on Restocking Fees
Most states have laws regarding restocking fees. In some states there may be a limit or it may be illegal for any amount to be charged to consumers. Contact your Department of Consumer Affairs and find out what the laws are on restocking.

If the Product Does Not Work?
If you purchase a lemon, do not pay a restocking fee. You may need to prepare to climb the management ladder to remove the fee, but stick to your guns. Most all stores state that they do not charge restocking fees for faulty merchandise (within specific time periods).

The Bottom Line

Do the research before you buy. Do not take the salesperson's word for it that the fee will be waved if it is the policy of the store to charge a restocking fee. Get a manager's written approval.

More: Save Money By Avoiding Hidden Costs and Fees