This is a guest post looking at how long returns periods should be, if free returns makes sense and what makes the returns process attractive for consumers, written by Matthew Robertson, Co-CEO of NetDespatch.
I’ve recently read a number of interesting articles around continued changes and greater returns requirements for retailers, in particular eBay merchants, and this was across various different vertical markets. The point being that many eBay merchants can no longer offer 14 day returns on sales and must opt for 30 day terms. This got me thinking about whether returns policies should be longer than they are and if they were would this have a positive impact on consumers when they come to buy products? For example, would they buy one product over another because they had a longer returns window or do they not really think about it? How important is the returns process to the consumer?
As we buy more and more goods online and as our buying habits change, so we have less opportunity to ‘try before we buy’ and therefore a greater propensity to order multiple sizes or various colours because we might not know exactly what size, style or colour we prefer until we can get our hands on the physical goods. This in itself has led to a greater proportion of returns – it makes sense – the more you buy online, so the more you return.
Here at NetDespatch, we certainly know from research that we have commissioned over the years that being able to return goods quickly and easily and also having a free return service is a great incentive for consumers. Especially, we found, where the younger shopper is concerned.
Research that we did around returns entitled, Many Happy Returns, identified a number of UK consumer return habits and drivers. For example, over 28% of those surveyed had returned products they had purchased online in a 12 month period, which is much higher than the returns rate in-store. Likewise 31% of those surveyed stated that they would only purchase from retailers who have a free returns policy in place.
The message that came across loud and clear from the research is that consumers demand speed and transparency. 53% of respondents said they expect to be refunded within 24-48 hours, whilst 47% expect to be able to track their returns. One interesting stat for the retailer is that returns do drive additional purchases, especially when returning an item in store, here nearly half (48%) admitted that they are likely to purchase another item whilst there.
Returns are certainly the less enjoyable part of the whole online shopping experience and always seem to be viewed as tedious by the consumer. Therefore the easier this transaction is the better the relationship between the shopper, carrier and retailer. What is certainly true is that returns of any kind, and perhaps more specifically the wrangling over returns with a difficult customer, is a greater problem for smaller merchants than the larger retailers with more resources and bandwidth.
Here on Tamebay, I saw a merchant say that several years ago it had increased its returns from 14 to 30 days and saw only a very small increase in the number of returns. It then extended to 60 days and saw no change and it now offers 12 month returns and again this has made no difference to the volume of returns. But what it has done is created an enormous amount of goodwill in the eye of the consumer. The merchant stated: “I’d like to offer longer returns via eBay’s system, but they don’t allow longer than 60 days, so we simply state it in the listing details. We’re even considering offering perpetual returns as it’s potentially a good marketing hook and we don’t expect it to have any negative effect.” However, he did go on to say that what they sell is almost always re-sellable and very rarely do they have to throw anything away and also the packaging is easily and cheaply replaced. I appreciate that this is not the case for many sellers, so everyone has to make their policy to fit their particular business.
We all know that the modern shopper has shifted not just in their buying habits i.e. online versus in-store but also their returns habit. But as innovations in delivery, supply chain and customer experience have proliferated; so online returns have been left to stagnate a bit and I think it is now time for both the on and off-line world to look more closely at returns. Only recently we’ve seen some of the UK’s leading retailers really begin to leverage a strong returns proposition as a powerful tactic in developing customer loyalty. And as a result, returns are now beginning to emerge from the shadows and into the light. So whether it’s free returns, varying locations for returns, extending the return window times – these initiatives all demonstrate that attitudes are changing towards returns. And if you ask me, this can’t come soon enough – returns must keep up with the modern consumer, otherwise this will impact on the retailer’s brand. A longer returns policy will only add a day or so onto the average length of return but can have a huge uplift on conversion and customer satisfaction.
One last thought: returns will only go up. Research undertaken by ReBOUND: Rethinking Returns, shows that 40% of shoppers under the age of 35 said they return more items than they did two years ago, and a third say they expect to return more than 6 items this year.
Returns can be a powerful way to re-engage customers and deliver true customer loyalty. Throughout each step of the returns journey you have an opportunity to talk to your customer and ensure they are informed about what’s going on. Our research showed that not enough is done to educate consumers about returns and often the returns process is so painful it switches consumers off. So as the fight for the consumer wallet continues, perhaps retailers should look more closely at their returns policies.