📦 RIP, free returns

Read enough about AI and two givens emerge: it’s the most constructive thing to ever exist… and also the most destructive.

Here’s the latest on AI’s capricious ways.

Giveth: More money to those who haveth

Economist Yingying Lu sees one consensus forming about money in an AI age: inequality will increase.

Why?

• As AI replaces labor, the working class (and unions) hold less leverage.
• Capital-rich institutions, meanwhile, wield more power.

Further, governments’ power to redistribute wealth could diminish as labor reductions shrink tax bases.

Taketh away: The era of supersized companies

AI-driven automation reducing headcounts shouldn’t surprise you — it’s already happening.

But there’s another way AI could shrink company sizes: leading by example.

• Take OpenAI for instance: The ChatGPT maker shifted society with only ~375 employees. (Quite a different model from Meta’s ~66k-person workforce.)

Giveth: Improved vaccines

Baidu Research scientists developed an AI tool that can build more intricate mRNA structures, a development they expect will produce more potent vaccines with longer shelf lives.

The tool has only been tested for covid and shingles in mice so far, but antibody response has been encouraging.

Taketh away: Any doubt who America’s sweetheart truly is

Snoop Dogg isn’t an AI expert; he confirmed as much during a panel last week.

On investing in AI, the rapper said: “I’m like, are we in a fucking movie right now, or what? The fuck, man?… Shit, what the fuck? I’m lost. I don’t know.”

But give the man credit: He distills the feelings of this dizzying AI moment perfectly.

You know the drill: You find a great pair of shoes online but are between sizes, so you order two pairs and return whichever one doesn’t fit.

It was a foolproof, reliable system. It worked. That is until retailers said, “Pay up, losers.”

OK, they might not have used that exact language, but the sentiment stands: Per The Atlantic, an estimated 41% of retailers charged some kind of return shipping fee in 2022, up from 33% in 2021.

• DSW charges $8.50 for returns
• LL Bean takes $6.50 per returned package
• Abercrombie & Fitch deducts $7 for online returns
• Even Amazon started charging customers $1 for dropping packages at select UPS stores

While most retailers won’t charge if you return your rejected items at a brick-and-mortar location, standing in line at a cash register really takes the joy out of online shopping.

(We wanted to order our adult onesies and self-help books in private — that was the whole point!)

Why the change?

The average online purchase return rate is 15%-30%, and Americans returned $800B+ worth of goods in 2022. That’s a lot of boxes.

To make matters worse, a single return can cost a retailer $10-$20, not including transportation back to a warehouse, per The Atlantic.

Makes sense but…

… customers still aren’t pleased. More than half believe retailers should cover the cost of returns, and 62% said they’d shop elsewhere given a poor return experience with a brand.

While returns are more expensive than ever, so is therapy — so we might just stick with online shopping as our coping mechanism for now.