How Return Policies Impact Retail Sales

Ecommerce sales are soaring: This year’s Thanksgiving sales, for example, hit a record $3.7 billion, up 28% from 2017.

At the same time, there is no doubt that for today’s retailers, returns are the new normal.

As consumers buy more online, shopper expectations are sky-high for a seamless and transparent experience throughout the path to purchase, including the opportunity to return products quickly and easily.

No success-seeking retailer wants anxious and frustrated customers who find the process of returning an item at best an annoyance and at worst a miserable experience.

In an age of fierce competition, getting your retail returns house in order can be the critical difference between keeping or losing first-time and repeat sales.  But what if your return policies are preventing sales in the first place?

Our new 2018 Consumer Report: The State of Returns: What Today’s Shoppers Expect, which surveyed more than 1,300 online shoppers, found that not only do easy returns drive loyalty (a whopping 96% of shoppers said they would shop with a retailer again based on a no-hassle return experience), but that some retail return policies can put the kibosh on a sale right from the start.These are the six biggest return dealbreakers. Consumers gave a big thumbs-down to:

  1. Paying for return shipping. Our 2018 Consumer Report found that more than two-thirds of shoppers say they’re deterred by having to pay for return shipping (69%).
  2. Forking over a restocking fee. 67% of consumers say having to pay a restocking fee would be a big reason for not shopping at a specific retailer.
  3. A hard-to-find return policy. Who wants to be a detective to find the return policy on a retail website? A third of shoppers say they would go elsewhere if a return policy was tough to track down.
  4. A negative return experience. Many shoppers still want the item they return. But if they returning a product was a huge pain, a sizable 16% will simply switch retailers and go elsewhere.
  5. No in-store return policy. Buying online and picking up/returning in-store is becoming more and more common—so consumers are likely to expect this convenience, and it has become a competitive advantage for retailers that offer it. In fact, 17% of respondents said they would not make a purchase without the option to return to a store, while another 40% say it’s easier to return to a store than by mail.
  6. A complicated return process. Keeping the returns process simple can reap big retail rewards. Unfortunately, many retailers aren’t heeding that advice: More than half (54%) of shoppers say they had to print a return label for their most recent return, and 32% say they needed to contact the retailer for return authorization

By making return policies easy to understand and the process simple and seamless, retailers can capture this hard-won revenue and keep customers coming back. Here are three important key tips to transforming your return policy from one that frustrates customers to one that simplifies their lives and boosts loyalty to your brand:

  1. Ease shopper concerns. There will be less anxiety all around with good communication and a transparent returns process, including updates about refund status and package tracking capabilities.
  2. Don’t make customers wait. Most shoppers exchange or replace the items they return, so don’t make customers wait until the return process is complete to issue a refund or put a new product back in their hands. You’ll make it more likely that they stick with you rather than switching to a competitor.
  3. Treat returns with care. Returns are an integral part of online shopping and your return policies should reflect that. So, treat customers who return with the same care as you would during any other part of their path-to-purchase journey, whether it is a fast refund, updates about the status of returned packages, or the option to return in-store.

Want additional insight and tips into making sure your return policies inspire shopper loyalty and keep customers coming back for more? Download our 2018 Consumer Report: The State of Returns: What Today’s Shoppers Expect.

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