DISCUSSION
Will cracking down on serial returners solve retailers’ return problem?
Written by Tom Ryan
A university study concludes targeting serial returners is the smarter path to reducing return costs because targeting regular shoppers with stricter return policies will likely backfire.
In one experiment, the researchers led by Iowa State University asked over 460 participants to imagine they were loyal customers of a retailer and planned to return a recent online purchase. Half were told the retailer was shortening its return window for all customers (generalized policy) while the rest were told the change would only affect serial returners (targeted policy).
Participants were found to be significantly more likely to speak negatively about the retailer when the policy change was generalized. Further, negative word of mouth was significantly related to intentions to switch to a different retailer.
In another survey, 100 participants were asked their thoughts on generalized versus targeted policy changes. When the return policy change was targeted (aimed at serial returners), 44 percent expressed positive emotions, 13 percent negative emotions, and 43 percent, neutral. Positive respondents often referred to the fairness of the updated policy.
Robert Overstreet, a supply chain management professor at Iowa State, said in a press release, “Respondents largely understood that cheaters were increasing the price paid by everyone.”
When the return policy change was generalized, 64 percent of participants expressed negative emotions, only two percent were positive and 34 percent neutral. Nearly half of the participants indicated they would speak negatively about the change to family and friends (45 percent) and shop at another store (42 percent).
Despite some positive word-of-mouth from instituting a policy aimed at serial returners, both surveys showed low-intensity communication for a targeted policy change (website update or store signage rather than PR/social media push) led to the best outcome.
Retailers are tightening their return policies (e.g., shortening return windows, charging return shipping fees) amid higher labor, shipping and storage expenses. According to Pitney Bowes’ BOXpoll survey from earlier this year, online returns cost retailers an average of 21 percent of order value.
Narvar’s “2022 Returns Benchmark Report” found 63 percent of shoppers surveyed admitted to bracketing (purchasing multiple variations of an item), up from 55 percent in 2019. A growing number of shoppers (15 percent) say bracketing is "just how they shop now."
Targeting serial returners to stem a growing problem for retailers – Iowa State University
Is it time to shut down the free returns party? – RetailWire