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Need to Return an Ugly Sweater? Know This Before You Do

While millions of Americans will shop the after-Christmas sales this week, many will also bring back gifts -- whether an ugly sweater or an unwanted kitchen appliance -- that missed the mark.

There's likely no need to rush. Many stores extend their normal return period for holiday purchases into January for items bought in November and December. But it pays to know the specific retailer's return policy before heading to the mall.

15 percent of holiday gifts will be returned 0:21

"Retailers try to be extra nice to people bringing things back because this is a chance to wow someone who might not be a customer," said Edgar Dworsky, founder of ConsumerWorld.org, an online consumer resource guide.

While some stores have tweaked their return rules this year to add new restrictions or offer new benefits, most have kept their return policies the same, according to Consumer World's annual return policy survey.

"Overall, most holiday return policies remain pretty generous," Dworsky told NBC News. "But, they also continue to be very complicated, so you really have to study the fine print carefully."

Two noteworthy policy changes highlighted in the survey:

  • Sears dropped its tiered return policy: 30, 60 or 90 days depending on the merchandise categories. Now most items must be returned within 30 days.
  • Target added a one-year exchange/refund provision for its own store brands.

Free return shipping continues to be a growing trend for online retailers. This year, nearly half (49 percent) of them will pay for you to send back unwanted merchandise, according to a report by the National Retail Federation (NRF). It predicts free return shipping will "significantly increase" over the next year as online retailers try to remain competitive.

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"And that's a great big plus for people who shop online," said Tod Marks, senior editor at Consumer Reports. "We've come to expect free shipping as the entry point when we buy something online, but that's never been the case with returns. Now, it's become more of the norm and it takes away a big headache."

In a just-released report, Many Happy Returns, Consumer Reports highlighted the retailers that it said have the best return policies: Costco, Eddie Bauer, Harry & David, Land's End, Kohl's, L.L. Bean, Orvis and Zappos.

Fighting return fraud

Return fraud is a year-round issue, but it is especially rampant after Christmas. U.S. retailers estimate that 3.5 percent of their holiday returns this year will be fraudulent, according to the NRF's Return Fraud Survey. Some key findings of that report:

  • Holiday return fraud is expected to cost retailers $2.2 billion, up from about $1.9 billion last year.
  • It's estimated that about 10 percent of returns made without a receipt will be fraudulent, up from 5 percent last year.
  • 30 percent of the retailers surveyed said they've seen an increased in fraudulent purchases made with cash.

"Return fraud remains a critical issue for retailers with the impact spanning far and wide, in-store and online," said Bob Moraca, the NRF's vice president of loss prevention. "While technology has played a significant role in deterring many in-person fraudulent transactions that would have otherwise gone unseen, there is little that can be done to prevent a determined criminal who will find a loophole one way or another. When it comes to retail fraud, retailers can build taller walls, but criminals continue to find taller ladders."

Rise of Online Shopping Adds to Retailers' Gift Return Headaches

Those "taller walls" include requiring a receipt and identification before processing a return. The NRF survey found that eight in 10 retailers (85 percent) require some form of ID if the customer does not have a receipt. That's up from 71 percent last year.

But some major retailers are drawing the line at no-receipt refunds.

Sears and Kmart's return policies, for example, state very clearly in bold type that "refunds and exchanges will not be given without a receipt."

If a store will take something back without a receipt, you may be limited to an even exchange or store credit. Even then, you may only get the lowest price that item sold for in the last several months, not what the gift-giver actually paid for it.

Four tips to make holiday gift returns easier

Consumer Reports provides this advice, which it says should result in many happy returns:

  • Don't open the box. If the box is open you may get hit with a restocking fee - typically 15 percent of the purchase price. This is most common for electronics. Computer software, CDs and DVDs are rarely returnable once the packaging is open, unless they're defective.
  • Bring the Receipt: Hold onto receipts for gifts you purchase and don't be shy about asking givers who bestowed unwanted presents on you if they have the receipt. Without that proof of purchase, you may not be able to return the merchandise.
  • Check Return Policies and note any time limits. You can do that online or look for the sign at the store's customer service counter. For items purchased online from a merchant with walk-in locations, check to see if they allow in-person returns.
  • Bring ID. Many chains now use computerized return-authorization systems to spot return abuse. They will ask for your driver's licenses or other government-issued ID and may store this information with your shopping and return history.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.