Why Retailers and Brands are NOT making returns difficult!

As we enter the peak retail season, I was reflecting on headlines from last November and December. I vividly recall headlines such as "Retailers Cracking Down on Returns" or "Retailers Making Returns Difficult." Initially, I dismissed it as the media's attempt to create sensational headlines, taking the prior narrative of "Retailers Don't Want Returns" to an exaggerated extreme, without truly grasping the underlying rationale behind retailers' actions.

Regrettably, this notion persisted through the year. Let’s revisit those headlines and understand what is really taking place.

Taking returns comes with a cost, and there's no assurance that the item can be resold. With advanced analytics, retailers have become adept at evaluating whether it's economically viable to accept a return. Items that are large, unwieldy, or low in value can often result in a loss if accepted as a return. Savvy retailers have chosen to refund the consumer and allow them to keep or donate the item. For instance, I purchased a paddle board. Due to its size, it was shipped via UPS Freight, which incurred substantial shipping costs. Unfortunately, the board arrived damaged. The retailer promptly replaced it and advised me to keep the damaged board. Why? Because it simply didn't make sense to bear the high cost of return shipping for a damaged item.

The phrase "Don't Want Returns" pertained to programs that offered consumers a refund without the need for them to physically return the item. Not only do these programs make environmental and economic sense, but they've also been proven to bolster customer loyalty.

Now, let’s address the notion that retailers are “cracking down” on returns.

The impetus for these headlines stems from changes where some retailers have implemented a fee for shipping returns. However, it's important to clarify that this isn't a crackdown. Rather, it signifies that certain retailers are beginning to grasp the entirety of the shopping journey and how to balance customer experience with returns processing.

To begin with, studies have shown that a substantial percentage of online shoppers prefer to return goods to a physical store rather than shipping them back, ranging from 62% to 74%. I am one of those consumers – I will always return to the store if a store exists within my area. The option for in-store returns often influences consumer purchasing decisions. There are various reasons why consumers prefer this route.

Moreover, returns made in-store offer significant advantages for retailers:

• No return shipping costs
• Reduced returns processing expenses (store staff is already present)
• Real-time assessment of item quality
• Real-time evaluation for potential fraud or counterfeit items
• Swift return to stock and resale through return to shelf
• Opportunity to upsell additional items to consumers while in the store

Retailers who have introduced a fee for return shipping maintain a substantial number of physical stores, providing consumers with their preferred return option, in-store, free of charge. The fee serves to encourage in-store foot traffic and streamline returns.

In an ever-evolving retail landscape, it's crucial for retailers and brands to stay attuned to emerging trends and adopt strategies that align with both customer expectations and business objectives. Balancing cost-effectiveness with customer satisfaction remains at the core of successful returns management.