Are Easy Returns Online’s Achilles Heel?
With free shipping and other lenient return policies becoming common practice, as much as a third of all online sales gets returned, according to a report from the Wall Street Journal.
Interviewing retailers such as Rue La La, QVC and fashion retailing startup Modnique.com, the article explored many ways e-commerce companies are trying to reduce returns based. The strategies included:
- E-mailing fewer discounts to serial returners and better offers to those who return less;
- Sending chronic returners coupons for categories seeing fewer returns (beauty, jewelry) over those seeing more (apparel, footwear);
- Recommending likely size and fit options based on purchasing and return history;
- E-mailing follow-up instructional videos or instructions for items that face a learning task, such as using an at-home facial toning device;
- Empowering customer agents to offer "appeasements" — gift cards or small discounts — to persuade customers to keep products they would otherwise return due to slight damage or other reason.
But getting much of the attention on blogs was the claim that online returns can amount to up to 30 percent of sales, an estimate from Kurt Salmon Associates (KSA).
Implicit in the KSA estimate was that some categories face minimal returns while those on the higher side included apparel, footwear and others in which trying-on, touching and seeing close-up becomes critical to the purchasing process.
The e-commerce execs interviewed all agreed that returns were a costly and growing problem as consumers get more comfortable with lenient return policies. Paula Cuneo, a 54-year-old teacher who recently ordered 10 pairs of corduroy pants in varying sizes and colors on gap.com and returned seven of them, he told the Journal. "I feel justified. After all, I am the customer."
Despite the return inducement, e-tailers apparently have no plans to tighten policies given increasing expectations around hassle-free online returns.
According to the 2013 UPS Pulse of the Online Shopper survey, 62 percent of online consumers had returned an item in 2013, up from 51 percent in 2012. If an online retailer offered a hassle-free return policy, 67 percent of respondents would shop more with that retailer, 64 percent would recommend the retailer to a friend, and 48 percent would drop another retailer with a less easy returns process.
- Rampant Returns Plague E-Retailers – Wall Street Journal
- Retailers tracking what customers return – USA Today
- 2013 UPS Pulse of the Online Shopper – UPS
- Free Shipping: Perk or Permanent? – RetailWire
- Study Finds Wide Benefit to Free Online Returns – RetailWire
Are hassle-free returns becoming a requirement? Will e-commerce players eventually have to tighten return policies? What can e-tailers do about habitual online returners?