Will guilting consumers help reduce online’s high return rates?
Gad Allon, a professor at Wharton School of Business, believes raising consumer awareness is key to reducing retail’s massive rate of returns.
“During your holiday shopping, do your part to stem return culture by choosing carefully and aiming to buy for keeps,” lectured Prof. Allon in a syndicated editorial that appeared last month in the Los Angeles Times, Miami Herald and other publications.
The column noted that about 30 percent of online purchases are returned, including half of clothing purchases — and a quarter ends up being discarded. In addition to waste, returns take a heavy toll on the environment as product piles up in landfills in addition to the greenhouse gases emitted as they’re shipped back and forth.
The high rate, he wrote, is partly attributable to the way consumers have been conditioned to return online items after Zappos began offering free returns for up to a year and others followed with their own lenient policies.
Retailers in particular are challenged by the logistic inefficiencies of returning items quickly to selling floors.
“It’s a time-consuming process that has little value,” the professor wrote. “Accepting a product and preparing it to be shipped back is viewed as a nuisance, so not much thought has gone into making the process more efficient. Yet most companies still offer generous return policies to keep their customers coming back.”
The author offered some solutions, including using stores as return centers. For certain products, letting a customer keep the item and get a refund might be a money saver and loyalty booster.
Speaking on Wharton Business Daily on SiriusXM, Prof. Allon expressed optimism that shoppers will realize their role in the process. He said, “Consumers, hopefully, will become more aware of the impact, both financially and in terms of the carbon footprint of this behavior.”
Retailers this holiday season are again offering longer return periods than typical as shoppers are making purchases earlier than normal amid threats of shortages. A recent Narvar survey found 58 percent of consumers admit to “bracketing,” or purchasing multiple versions of the same item online to try at home, knowing some will be returned.
- Op-Ed: We send back 30% of what we buy online. How our return culture alters the supply chain – Los Angeles Times
- How Consumers and Retailers Can Reduce Returns – Knowledge@Wharton
- Inmar Intelligence Survey Reveals that a Good Return Experience is a High Priority for Online Shoppers – Inmar Intelligence/Globe Newswire
- Holiday return policies more lenient, as shoppers start early – NBC 10 News
- goTRG Consumer Survey – Holiday Returns During COVID-19 – goTRG
- Narvar Study Finds 58% of Consumers Intentionally Buy More Goods Than They Intend to Keep – Narvar/PRNewswire
DISCUSSION QUESTIONS: Do you see any benefit to retailers in making consumers aware of the likely negative repercussions of their online returns? Is there a way to extend an eco-message around excessive returns while affirming a relaxed return policy?