Dive Brief:

• Whole Foods will accept Amazon returns across its entire store fleet of more than 500 stores during the holidays, according to a Thursday announcement from the online retailer.
• Amazon Fresh and Amazon Go stores will also accept returns along with Amazon Books and 4-Star stores. Customers are instructed to initiate their returns online and then bring their items to the store in the original packaging along with a QR code.
• Amazon, which has been criticized for its returns policy in the past, is expanding the number of free drop-off locations this holiday season and extending its returns policy, noting any items purchased between Oct. 1 and Dec. 31 can be returned until the end of January.

Dive Insight:

Whole Foods has accepted Amazon returns at some of its stores stretching back to 2017 when the e-commerce giant made its $13.7 billion acquisition of the food retailer. Boosting the service to Whole Foods’ locations nationwide will surely help Amazon by offering more free drop-off points for its merchandise, but it's unclear if the struggling grocer will benefit. 

Directing Amazon customers into stores promises to boost Whole Foods’ foot traffic, which has not recovered from early pandemic lockdowns in the same way other grocers’ have. However, directing package-toting shoppers to the customer service desk doesn’t guarantee they’ll stick around to make incremental grocery purchases and will likely require additional merchandising and service work from Whole Foods.

Dedicated Whole Foods shoppers who also shop Amazon will likely appreciate the one-stop convenience of performing a holiday return and food shopping in one trip. But they may be perturbed by long lines at the customer service desk. Already this year, customers and employees have noted frustration at the large number of online workers picking orders in Whole Foods’ aisles.

The post-holidays footprint for Amazon returns at Whole Foods remains unclear at this point. What is clear is that this is yet another example of Amazon injecting its DNA into the specialty grocer’s operations. Amazon pick-up lockers, Prime benefits and credit card tie-ins have all become part of the e-tailer's strategy to convert more Whole Foods shoppers into Prime shoppers, and vice versa. But the strategy hasn't yet produced the desired results for either company.