The returns process and reverse logistics is one of the more difficult aspects of running a retail business, but making the experience better for shoppers has its benefits.
And it appears that retailers are starting to take that to heart, although with some caveats. While retailers are making their return policies much more rigid, including payments and tighter return windows, consumers are getting used to paying for conveniences that used to be free and, in turn, some shoppers are happy with their experiences, so long as they get something out of it.
Overall, when considering their most recent return experience, an overwhelming majority of Americans (87%) report the process was easy, with nearly half (49%) saying it was “very easy,” according to a new survey conducted by Harris Poll in partnership with Retail Brew.
- The holiday shopping season makes returns much more complicated given the sheer volume of sales and the nature of returning gifts, which underscores the importance of having a process that is simple and affordable, particularly for e-commerce operations.
- Additionally, shoppers have become accustomed to returns being free, but a growing number of retailers, including H&M and Zara, recently have gone with the opposite approach of charging return fees.
Vijay Ramachandran, VP of go-to-market enablement and experience at Pitney Bowes, said in a statement that consumers are having a difficult time letting go of Covid-era shopping behaviors and largely have gotten used to free returns made easier through drop-off locations, which became more popular during the height of the pandemic.
- According to an October 2022 report from return logistics company Happy Returns, 79% of respondents want to avoid mail-in returns as much as possible, which typically come with a cost around the holidays.
“While US consumers grapple with economic challenges including the lingering impacts of inflation, their discretionary spending—particularly online—appears to defy gravity headed into the holidays,” Ramachandran said. “Online sales so far this year are up more than 7% versus 2022, even though online prices have been on a deflationary trend for more than a year.”
Run a tight ship: More than three quarters (78%) of respondents said they are likely to shop with a retailer again after having had an easy returns experience. Only 16% said it would have no impact and 6% said it would be unlikely.
- Charging for returns in general isn’t very popular: 77% said they are likely to shop with a retailer that doesn’t make them pay return costs. A similar percentage (61%) reported that they would be unlikely to shop somewhere that does make them take on those costs.
- Something else for retailers to consider is that younger shoppers, who make up the bulk of online shoppers are the ones making returns more frequently. In the past month, 29% of Gen Zers and 34% of millennials have made a return in the past month, while 30% of Gen Xers and 32% of baby boomers have not made a return in the past year.
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Ramachandran said that the returns process should be a benefit for shoppers, particularly those who are part of a loyalty program or regularly shop a store.
“Offering more convenient returns features—like free return shipping, faster store credit, etc.—to your best and most loyal customers drives more value to your loyalty program and, in turn, more repeat business for your brand,” he told Retail Brew in an email.
Zoom out: The buy online, pick-up in store model is an advantage brick-and-mortar retailers like Walmart and Target are known for, but e-commerce brands also provide in-person options for returns. Amazon customers can return packages at Kohl's where they can be packed, labeled, and shipped for free, while Ulta Beauty stores take returns from Revolve.
There’s no one-size-fits-all solution when it comes to returns, but the most consumer-friendly approach, given the brand or retailer, is most likely to drive the best customer experience.
“Retailers often assume that a refund is the only resolution for a customer who isn’t satisfied with their order,” Ramachandran said. “But offering something as simple as free exchanges, especially paired with a fee for returns without an exchange, allows the brand to keep the revenue.”