Why Target Offers a One-Year Return Policy for Cat & Jack

Beyond the $4 T-shirts and $8 jeans and dresses, one thing some parents have come to love about the brand is Target’s one-year satisfaction guarantee — an unusually generous policy in retail, especially as some retailers start charging for returns.

Some have even posted videos on TikTok in which they return hundreds of dollars of used clothing for cash and store credit.

Here is Target’s policy and the strategy behind it.

What is the return policy for Target-owned brands like Cat & Jack?

Target offers more than 45 private label offerings, all backed by the same guarantee: “If you are not satisfied with a Target private label item, return it within one year with a receipt for an exchange or refund.”

Some of the company’s best-known brands include All in Motion activewear, Made By Design kitchen and dining supplies, Mondo Llama arts and crafts, Cloud Island baby items and Room Essentials.

“Target’s returns policy is extremely generous and is designed to build trust in its own brand products and create a strong customer service ethos,” Neil Saunders, managing director of retail at GlobalData, told Business Insider. “This is particularly important in the children’s fashion sector, where parents are spending a small fortune and clothes are put through their paces by often very active children.”

He added: “There are always concerns about product quality and longevity, so Target’s policy takes that concern out of the equation and gives parents peace of mind.”

Christina Hennington, Target’s chief growth officer, often highlights the Cat & Jack brand and return policy during the company’s quarterly earnings calls, and a Target spokesperson previously told Business Insider that the return policy reflects the company’s confidence in the value of its private label offerings.

“One of the reasons Target has very flexible return policies is because of customer loyalty,” Hitha Herzog, chief retail analyst at H Squared Research, told BI. “They don’t want to lose market share or experience any customer attrition when it comes to their private label brands.”

Returns are possible without proof of purchase, but the customer must present identification and each individual can only return items valued at $100 without a receipt within a 365-day period.

Items purchased with a Target Circle membership are automatically saved, so paper receipts are not necessary.

The same digital tools Target provides to make it easier for customers to track their purchases also help the company deliver personalized promotions, increase customer loyalty and drive sales, according to Target investor presentations.

Does this policy cost Target money?

In some ways, the return policy helps Target make sales because it encourages shoppers to buy its private labels. The total value of Cat & Jack’s returns almost certainly represents a small percentage of the brand’s total annual revenue of $3 billion.

Target is also a data giant, and the cost of returns is factored into the price of an item, Herzog said: “Even if there are a bunch of returns that come back after 250 days, saying the customer was not happy with the product, that store has already factored that into the price.”

In-store returns also naturally bring shoppers into stores, and the company says an increase in foot traffic over the past 12 consecutive quarters is driving the majority of sales growth.

In other words, a parent who returns a Cat & Jack outfit is very likely to buy a new one — or Mondo Llama art supplies or Good & Gather groceries or more.

Will Target change this policy?

Target is closely monitoring consumer trends, and if it sees problems with its returns department, it could take steps to limit its policy. Some employees and customers have also said their stores are taking a stricter stance, particularly on Cat & Jack products.

“Certainly some people could abuse the return policy, but Target has probably calculated that it’s a very small proportion of their business, so it doesn’t really matter,” Saunders said. “That said, if too many people are taking unreasonable advantage of it, they could start to take restrictive measures.”

The notion of “satisfaction” can be an ethical gray area, although it’s perfectly legal for a customer to say they’re not happy with a purchase 360 ​​days later, Herzog said.

“These people are admitting on social media that they’re actually pretty happy with it, but they’re just finding a loophole in that return policy,” Herzog said. “If the return policy allows you to do it, I guess you can do it. But ethically, should you do it? I wouldn’t.”

However, when it comes to Target, the official policy remains unchanged, as the company says it remains focused on allowing shoppers to purchase its products with confidence, particularly those in its private label portfolio.

If you are a Target employee and would like to share your perspective, please contact Dominick Reuter by email or Signal at 646-768-4750. Responses will be kept confidential, and Insider strongly recommends that you use a personal email address and non-work device when contacting us.