Target Corporation’s stock plummeted by approximately $27.27 per share by the end of February, erasing about $12.4 billion in market value. The drop came on February 28, the designated economic blackout day, and coincided with mounting backlash over the retailer’s decision to abandon its diversity, equity, and inclusion (DEI) commitments.

The National Newspaper Publishers Association (NNPA) has taken action through its Public Education and Selective Buying Campaign. NNPA President and CEO Dr. Benjamin F. Chavis Jr. said, “Black consumers helped build Target into a retail giant, and now they are making their voices heard. If corporations believe they can roll back diversity commitments without consequence, they are mistaken.”

Reverend Jamal Bryant, pastor of New Birth Missionary Baptist Church in Georgia, has led calls for a “40-Day Target Fast,” urging Black consumers to withhold their spending at the retailer. “Black people spend $12 million a day at Target,” Bryant said. “If we withhold our dollars, we can make a statement that cannot be ignored.”

The NAACP also issued a Black Consumer Advisory in response to Target’s DEI rollback, warning Black consumers about corporate retreat from diversity initiatives. The advisory urges them to support businesses that remain committed to investing in Black communities.

Target is also facing legal battles. Shareholders have filed lawsuits challenging the company’s DEI policies, arguing that the commitments hurt financial performance. Meanwhile, conservative groups have sued over Target’s diversity efforts, claiming they discriminated against white employees and other groups.

“Consumers have the power to demand change, and Target is learning that lesson the hard way,” Chavis said.

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Corporate America’s retreat from diversity, equity, and inclusion (DEI) commitments is already having significant repercussions, with consumer boycotts, stock fluctuations, and mounting legal battles reshaping the financial landscape for major firms. Companies that once championed DEI efforts in the wake of George Floyd’s murder have begun to abandon these initiatives under mounting conservative pressure, only to face economic and public relations consequences of their own.

Target is at the center of a lawsuit alleging it misled investors about its Environmental, Social, and Governance (ESG) and DEI policies. The lawsuit argues that Target’s messaging led to widespread boycotts following its 2023 LGBTQ+ Pride campaign, which extended into a 2024 backlash. The impact on the retailer’s bottom line has been undeniable, with Target’s stock price experiencing a sharp decline. On a recent trading day, shares dipped another 28 cents. Further, Blue Chip Partners LLC reduced its holdings in Target by 6.8% in the fourth quarter, selling more than 10,000 shares.

Despite dropping its own DEI initiative, Walmart has fared better than Target, even as Saudi Arabia’s Public Investment Fund recently divested from the retailer. On Feb. 14, Walmart’s stock slipped from $105.30 per share opening to $103.60, a minor dip compared to the larger financial instability seen elsewhere.

Other corporations abandoning DEI commitments are feeling the strain in different ways. Ford, which eliminated its DEI program, is now facing what many argue is the karma of a staggering $2.5 billion in punitive damages from a recent jury verdict in Columbus. McDonald’s has seen its stock continue steadily declining, falling to $308.55 per share, with Blue Chip Partners LLC also selling off its holdings in the fast-food giant. Coca-Cola and PepsiCo, preparing to comply with executive orders to dismantle DEI programs, have also taken hits. Coca-Cola’s stock dropped by more than 63 cents, while PepsiCo saw a more than $1.19 per share decline.

Some companies that have retreated from DEI, such as Meta and JPMorgan Chase, have managed to hold their ground. Meta CEO Mark Zuckerberg has cozied up to MAGA figures, shielding the company from harsher backlash. Meanwhile, JPMorgan Chase CEO Jamie Dimon, who has long advocated for diversity, recently downplayed DEI training programs, insisting the bank’s approach to minority communities remains unchanged. The company’s stock has remained steady at $276.59.

Citigroup and Morgan Stanley have also largely avoided financial fallout, maintaining relatively stable stock prices despite walking back their diversity commitments. However, Citigroup’s decision to remove or alter its public-facing DEI language has drawn criticism. Goldman Sachs took a similar step, scrapping a requirement that companies it takes public must have at least two diverse board members, citing legal developments.

The entertainment and media industries are not immune. Disney has overhauled its DEI initiatives, dropping its “Reimagine Tomorrow” website and adjusting diversity-related content warnings. While Disney’s stock has fluctuated, it recently slightly increased by 79 cents. Meanwhile, PBS has shuttered its DEI office, citing the need to comply with anti-DEI executive orders.

Corporate compliance with Trump-aligned policies is also apparent in the beverage and consulting industries. Bloomberg reported that Coca-Cola and PepsiCo are adjusting their policies to align with federal contract regulations. Deloitte has told U.S. employees working with government clients to remove pronouns from their email signatures, rolling back its DEI goals. Accenture, another major consulting firm, has eliminated diversity targets in hiring and promotion, citing the Trump administration’s stance.

Retailers and financial institutions are also responding. Lowe’s has merged its employee resource groups under one umbrella and cut its participation in external diversity events. Truist Financial Corp. recently trimmed its stake in Lowe’s, selling off over 39,000 shares. Meanwhile, Amazon omitted DEI language from its latest SEC filing, signaling a broader shift in corporate strategies. Boeing has dismantled its DEI department, folding those responsibilities into human resources.

Consumer and activist backlash has been swift. The National Newspaper Publishers Association (NNPA), representing the Black Press of America, has launched a national public education and selective buying campaign in response to corporate America’s retreat from DEI. The NAACP has also issued a spending guide identifying businesses that have abandoned or upheld diversity commitments. Pastor Jamal Bryant of New Birth Missionary Baptist Church in Atlanta has called for a 40-day economic fast against Target, urging 100,000 people to halt spending at the retailer. Bryant noted that Target had pledged $2 billion toward Black-owned businesses but rescinded that commitment in January.

“Black people spend $12 million a day at Target,” Bryant said on the Black Press’ Let It Be Known news program. “Because of how many dollars are spent there and the absence of commitment to our community, we are focusing on Target first.”

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By Huseyn Abdulla, University of Tennessee

In 2018, L.L. Bean ended its century-old “lifetime” return policy, limiting returns to one year after purchase and requiring receipts. The demise of this popular policy sparked backlash, with several customers filing lawsuits.

It also inspired my team of operations management researchers to study how customers respond when retailers make their return policies more strict. Our key finding: Whether they often or rarely return products they’ve purchased, consumers object – unless those retailers explain why.

I work with a group of researchers examining product return policies and how they affect consumers and retailers.

As we explained in an article published in the Journal of Operations Management, we designed experiments to study whether and why return policy restrictions irk customers. We also wanted to understand what retailers can do to minimize backlash after making it harder for customers to return stuff.

We conducted three experiments in which we presented scenarios to 1,500 U.S. consumers who played the role of loyal customers of a fictional retailer. We examined their reactions to the fictional retailer’s return policy restrictions, such as charging a 15% restocking fee and limiting open-ended return windows to 365, 180 and 30 days.

Participants became less willing to buy anything from the fictional retailer after it restricted its long-standing lenient return policy. They also said they would become less willing to recommend the retailer to others.

This occurred because the customers began to distrust the retailer and its ability to offer a high-quality service. The backlash was stronger when the restriction was more severe. Even those consumers who said they usually don’t return any products often reacted negatively.

When the fictional retailer announced its new, harsher return policy using official communication channels and provided a rationale, there was less backlash. Consumers found the changes more justified if the retailer highlighted increased “return abuse,” in which customers return products they’ve already used, or the high cost of processing returns.

You might presume that making it harder and more costly to return stuff could drive some shoppers away. Our research shows that the concern is valid and explains why. It also shows how communicating return policy changes directly with customers can help prevent or reduce backlash against retailers.

Why it matters

Americans returned products worth an estimated US$890 billion to retailers in 2024. Processing a single item typically costs $21 to $46. Most of this merchandise ends up in landfills.

The rise of e-commerce and other technological changes have contributed to this trend. Another factor is the ease with which consumers may return stuff long after making a purchase and get a full refund.

Many other retailers besides L.L. Bean have done away with their long-standing lenient return policies. Over the past decade, for example, Macy’s, a department store chain, and Kohl’s, a big-box clothing store chain, have shortened the time frames for returns.

Macy’s restricted its open-ended return window to one year in 2016, further winnowed it to 180 days in 2017, then to 90 days in 2019. It then stopped accepting returns after 30 days in 2023. Kohl’s didn’t have any time limit on returns it would accept until 2019. Then it imposed a 180-day limit. Others, such as fast-fashion giants Zara and H&M, now charge their customers fees when they return merchandise.

However, research shows that customers value no-questions-asked return policies and see them as a sign of high-quality service. And when these arrangements become the industry standard, customers can get angry if retailers fail to meet it.

Interestingly, most retailers that restricted their policies didn’t tell customers directly. Instead, they quietly updated the new policies on websites, store displays and receipts. Although not drawing attention to bad news might appear prudent – as most customers wouldn’t notice the changes that way – dozens of threads on Reddit about these changes suggest that this isn’t always true.

What still isn’t known

We focused on restrictions on refunds and how long after a purchase customers could return merchandise. Other restrictions, such as retailers making heavily discounted items ineligible for returns, could also be worth investigating.

The Research Brief is a short take about interesting academic work.

This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Huseyn Abdulla, University of Tennessee

Read more:

• Why sending a belated gift is not as bad as you probably think − and late is better than never
• To control your spending this holiday season, stick with cash
• Inside the black box of Amazon returns

Huseyn Abdulla does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Feature Image: Shoppers line up with returns and exchanges at L.L. Bean in Freeport, Maine, on Dec. 26, 2010. Jill Brady/Portland Press Herald via Getty Images

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