Online retailers increasingly used relaxed return policies in the holiday season to wrest market share away from rivals, but they are now bracing for a potentially costly consequence – a heavy flow of unwanted gifts. Once viewed as a giant headache and profit bruiser, online returns today increasingly are being embraced by e-retailers as part of their business model. Cyber sellers are starting to loosen their return policies as a way to encourage consumers to shop online in a relatively under-developed Canadian e-commerce market. They feel the pressure to provide generous – or at least easier to understand – return policies as rivals ranging from discount titan Wal-Mart Canada Corp. to Canadian-based fashion seller eLuxe.ca and generalist Shop.ca tout free returns, the latter even allowing them up to a year later. “It’s one of those things that is the cost of doing business,” said Simon Rodrigue, general manager of Wal-Mart Canada’s e-commerce division. U.S. holiday returns will surge 37 per cent over last year to $63-billion (U.S.), according to predictions compiled by Liquidity Services, which helps manage returned goods for retailers such as Wal-Mart. Industry observers expect similar trends in Canada.