With return rates surging since the pandemic—roughly 14 percent higher in 2022 over 2019 according to returns management company Narvar—retailers have tightened their policies for taking back returned purchases. And those more stringent requirements haven’t gone unnoticed by consumers, according to data from digital supply chain and omni-channel commerce software provider Blue Yonder.
The company surveyed more than 1,000 U.S. consumers about return policies to gauge their opinions on returning purchases to retailers. One of the survey’s key findings was that 69 percent of consumers are aware of more restrictions on retail returns. And 38 percent feel those rules are inconvenient, while 29 percent said they were fair, and 22 percent deemed them unfair.
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Restocking fees were another point of contention among consumers, with 55 percent saying they were less likely to make a purchase if a retailer charges a fee for returns. Twenty percent of shoppers also said shortening the return window would deter them from making a purchase, and 13 percent didn’t want to bring returns to a physical location.
Dave Hamilton, senior director of retail industry strategy at Blue Yonder, said restocking fees no longer only apply to items such as electronics.
“That’s a little different situation than say, returning a pair of pants and being charged a restocking fee,” he said. “But we’re certainly seeing that there are our retailers that are using restocking fees as a way to deter returns.”
And the rise of online shopping has changed the nature of returns for many shoppers, particularly when it comes to apparel.
“Customers are ordering multiple items in different sizes because they can’t try it on,” Hamilton said. “Then they return the items that weren’t the right fit for them. Or sometimes they actually purchased extra items get free shipping, and then try to take advantage of the return process.”
According to Blue Yonder’s survey, 38 percent of shoppers make a return once or twice a year. Among the top reasons for those returns, incorrect size or fit leads the pack at 77 percent, followed closely by defective or damaged product at 65 percent. And 22 percent of respondents admitted to ordering several items to try for fit, while 11 percent returned extra items ordered to get a shipping discount.
Third-party return services have become more common with retailers such as Amazon allowing customers to make returns at Whole Foods, Kohl’s and UPS stores. And that model has become more appealing to consumers, according to Blue Yonder’s data. Of their respondents, 62 percent said they would be more likely to use a third-party return service if it offered free or reduced shipping fees. And convenient drop off locations and faster refunds also made third-party services attractive to 50 percent and 47 percent of respondents, respectively.
“And 41 percent of the shoppers also said they like third-party services because you have reliable tracking and confirmation of the returned items,” Hamilton said. “So that’s certainly something that allows them to feel much more comfortable about returning to a third-party place.”
And for third-parties such as Kohl’s, which offers a coupon to customers who bring in Amazon returns, providing this service can help drive traffic to their store and capture impulse purchases. Blue Yonder found that 54 percent of consumers returning purchases in-store sometimes report continuing to shop or make impulse purchases. And when they’re offered a discount or some other incentive, 73 percent of respondents say they’re at least somewhat likely to return an item in-store.
Hamilton said this data reveals that retailers can potentially turn returns into sales opportunities, particularly when they incentivize in-store returns for customers. But he cautions that store owners should be careful about how they offer that incentive.
“What you really have to understand is that how $5 off coupon is going to ultimately affect your margin,” he said. “If it’s $5 off a $25 purchase or $5 off a $50 purchase, now you’re at least trying to get that larger basket size. And therefore maybe that type of incentive makes more sense. But If it’s $5 off any purchase, then you’re obviously reducing the potential margin impact for yourself.”
Whether brands offer incentives or not, Hamilton said the key to ensuring a smoother return process for both the merchant and the customer is being clear and up-front about the return policy before the purchase is made.
“There are opportunities on the retailer side to make sure that their policy is clear, especially if they’ve made a change to their policy,” he said. “Especially for loyal customers that are shopping once a month or once every couple of months, if that policy has changed, it’s critical for the retailer to make sure that they’ve explained it to those loyal customers.”
