Here's documented proof that doing free returns of merchandise is good business:
http://bottomline.nbcnews.com/_news/...hases-357?lite
Quote:
It may not be fair for online retailers to pay for returns that aren't their fault, but it makes them more money, a new study finds. A lot more money. Even though returns of consumer gadgets alone costs companies $17 billion in 2011, the rewards of adopting the Zappos model of free-return shopping can boost customer spending up to 357 percent.
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For those that aren't aware of it, Zappos is an Amazon operation.