Welcome to the returns season. After weather-related shipping delays due to a nationwide storm the week before Christmas, the fulfillment end of the supply chain is somewhat back on track. But now carriers, retailers and suppliers are dealing with returns.
Industry analysts estimate that 10 percent of items bought in-store are returned, which compares to a whopping 30 percent of online purchases.
It’s a big headache for companies and an issue that can sour the relationship a brand has with a consumer if poorly handled. According to a survey from Voxware, 92 percent of shoppers polled agree or strongly agree “that the way retailers handle returns influences whether they will purchase from that retailer in the future.”
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Over the past several years, retailers are working to make returns more flexible. Walmart is now offering curbside returns. Also, shoppers can bring back items purchased at Walmart between Oct. 1 and Dec. 31 up to 90 days after it was bought. Amazon continues to allow shoppers to return items at a Kohl’s store. Target also allows returns up to 90 days following purchase. And if a shopper has a Target credit card, the retailer gives an additional 30 days.
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But what’s behind the high percentage of online returns? It’s hard to point a finger, but the Voxware survey found that 89 percent of respondents returned an item “due to retailer error (incorrect size, color or wrong item altogether), up from 41 percent in 2020. What’s more, 41 percent of respondents returned an incorrect item altogether — up from only 15 percent in 2020.”
Voxware also found that consumers are “willing to give retailers chances if they mess up.” The authors of the report said if the retailer makes a mistake, “consumers are willing to give retailers a second chance, as 65 percent of consumers will abandon shopping with a retailer after two to three late deliveries. Meanwhile, 81 percent of consumers would stop buying from the retailer if they messed up their orders altogether two to three times.”
The survey revealed that when retailers err, “nearly 70 percent of the consumers expect to receive the correct item within three to four days of informing the retailer of the error.”
What happens with items returned? This is where reverse logistics come into play. In a nutshell, reverse logistics is the process of moving a product from the end consumer back into the supply chain.
The process starts with the end user, the consumer, and ships the return to a retailer, brand or third party. The item is then processed and moves into a disposition phase. From there, the item is either refurbished, recycled or resold — all of which channels back to the consumers.
Unfortunately, many returns end up in a landfill as it is too costly to process. Reverse logistics company Optoro said returns in the U.S. generate nearly 6 billion pounds of waste annually.