Updated ,first published
IKEA has slashed its longstanding returns policy for opened items from one year to two months in a significant shift for the DIY furniture giant as it grapples with rising logistics costs and customers taking advantage of the “generous” policy.
The Swedish manufacturer told Australian and New Zealand customers that opened or assembled items must be returned within 60 days, rather than 365 days, winding back a policy that was one of its signatures.
From April 9, customers will only be eligible to receive store credit, and cannot be refunded money to their original payment method for change-of-mind returns.
An IKEA spokesperson claimed that the changes were made to “ensure [the returns policy] remains flexible” and “give peace of mind” to all customers, “while at the same time being sustainable for our business.
“Sixty days allows a fair time period for customers to be able to ‘test and try’ their product in their home,” the spokesperson said.
“These changes help us minimise misuse of the returns policy and allow us to continue offering high quality, affordable home furnishings to Australians.”
Unopened, unused and resealable products can still be returned within 365 days.
The shortening of IKEA’s returns policy, which had been in place since the mid-2010s, marks the end of a strategy that was designed to build consumer trust in the flat-pack furniture model and had become part of the Swedish firm’s brand in Australia.
In 2006, comedy group The Chaser tested the policy by attempting to return increasingly bizarrely built pieces of IKEA furniture to the chain. Most were accepted.
Across the retail industry, generous returns policies opened the door for customers to purchase more items than they intend to keep, like buying the same product in three different colours or sizes and returning two, a practice described as “bracketing” or “wardrobing”.
During the pandemic, many global retailers that had a low-cost or free returns policy began re-introducing return fees to combat the increasing cost of processing a return.
The returns process, sometimes referred to as “reverse logistics”, has become more expensive for retailers to cover as arrangements have to be made for the goods to move from the consumer back to the retailer or manufacturer and then assessed for returns, repair, recycling or disposal.
The number of retailers offering free returns fell from 49 per cent to 14 per cent between 2018 and 2025, according to data from deliveries software company Shippit.
“Easy returns have always been a powerful drawcard for consumers, but the unit economics was never sustainable for retailers,” Shippit stated in its latest report on deliveries. The 365-day returns policy opened the door for customers to use furniture for nearly a year before returning it to IKEA for a refund or a newer model.
“We’ve always looked at the IKEA policy as being quite a generous one,” said Shippit founder Rob Hango-Zada. “The cash-strapped consumer is certainly looking for outs when they make a decision. When you provide that facility, you’ll find consumers taking advantage of it.”
Higher inflation, pressure on petrol prices and Australia’s geographic spread have hiked operating costs and made it more difficult for retailers to bear the cost of returns.
As the fuel crisis continues, the logistics expert believes retailers will keep finding ways to reduce costs and liabilities, although global ecommerce juggernauts like Amazon, Shein and Temu will most likely keep their free shipping thresholds to maintain their competitive edge.
“You’re making the sale, which costs you money to service the customer,” Hango-Zada says. “You’ve got inventory that’s potentially damaged that you’re holding on to, then you need to clear it … if it can’t be resold, it needs to be cleared. It does make sense for retailers to tighten up in those areas.”
IKEA operates “as-is markets” in Australia that allow customers to buy used products. There is also a thriving secondhand market online for some of the Swedish chain’s best designs.
While the 365-day returns policy has been great for IKEA’s global brand, it has not been consistently applied around the world: in 2020, the Swedish furniture maker started reducing its returns window on assembled products from 365 days to 180 days in the US.
Canada has a 90-day full-refund window, meaning Australian and New Zealand customers are now subject to some of IKEA’s most stringent returns policies around the world.
Consumer advocacy group CHOICE director of campaigns Andy Kelly said IKEA’s policy change did not affect shoppers’ rights under consumer law.
“If there’s a fault with the product, you’re still entitled to a remedy if it happens within a timeframe the law would cover. That timeframe changes depending on the type of the product and how expensive it was,” said Kelly.
But he questioned IKEA’s description of the change. “It seems like a reduction in flexibility, to be honest.”
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect via X or email.
