What is Restocking Fee in Retail? Explained

A restocking fee is a charge imposed by a retailer when a customer returns a product, typically to cover the costs associated with processing and restocking the returned item. This fee is deducted from the refund provided to the customer and is applied in situations where the product is in good condition but is being returned for reasons other than a defect or error on the retailer's part. Restocking fees are common in certain industries, particularly for high-value or specialized items where the cost of handling returns and preparing the product for resale is significant. The purpose of a restocking fee is to offset some of the expenses incurred by the retailer when a customer initiates a return.