Pulling the plug on free returns can cause a shopper revolt; better approaches exist to stem the tide

Returns are an expensive proposition for retailers – experts estimate the average return costs a retailer between 15% to 30% of the original purchase price, and cumulatively, returns cost retailers $550 billion every year. As a result, many retailers have sought to end free return policies to stop the bleeding.

However, since free returns have been a fixture for some time now, the question is: Can retailers put an end to free returns without consumer backlash? We set out to understand consumers’ returns habits and perceptions by fielding a survey to over 9,000 shoppers.

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Retail Returns Are a Reality

A full 88% of respondents acknowledged returning products purchased online on at least an occasional basis. Meanwhile, 53% indicated their online returns are as frequent as their in-store purchase returns, and 18% said they return online merchandise at a higher rate than they do in-store returns.

The top three categories for product returns are clothing (82% of returns), footwear (51% of returns) and electronics (43% of returns).

Among the top reasons for returns are product damage and defects, which represent 81% of online returns. Following close behind this are products that don’t fit correctly, comprising 75% of online returns. Another 56% of returns are from shoppers citing dissatisfaction when a product does not meet buyer expectations or fails to match its description.

Hands down, our study revealed that charging for returns could be irreparable for retailers due to consumer backlash as 87% of those polled (nearly 9/10) say they would likely stop shopping with a brand or retailer that stopped offering free returns, and nearly 4/10 (39%) said they would be “very likely” to do so.

Shoppers Want Sustainability in Shipping and Returns

Nearly all consumers surveyed express at least some inclination towards doing business with a company that prioritizes eco-friendly initiatives in their return and shipping processes. 92% of consumers said they would be at least a little inclined to shop with a brand or retailer if they offered more sustainable return and shipping practices, while 4 in 10 (40%) would be very inclined to shop with such a brand. Embracing environmentally friendly shipping and returns practices not only benefits the planet but also can provide a competitive edge.

Retailers should also consider the immense potential for increasing sustainability from proactively preventing returns in the first place. This is because, while implementing eco-friendly shipping and return methods is undoubtedly valuable, minimizing their need altogether is a game-changer in terms of environmental impact by reducing the associated packaging waste, fuel usage, and emissions.

Reducing returns also enhances operational efficiency and reduces costs associated with processing returns, restocking inventory, and potential product waste. It allows for better resource allocation, optimized inventory management, and improved customer satisfaction. This all contributes to a more profitable business model.

Product User Testimonials Can Answer Pre-Purchase Questions, Reducing Return Likelihood

Since free returns seem obligatory, it’s imperative to take steps to reduce the flood of returns. User generated content (UGC), including product ratings and reviews and Questions & Answers on a brand’s website, is a powerful way reduce the number of returns.

72% of consumers are less likely to return a product they purchased online if able to read questions from other consumers and submit their own via the Q&A section on the product page prior to purchase. Being able to see photos and videos from other consumers before making a purchase reduces the return likelihood for 69% of shoppers. And, 66% of shoppers say the ability to read ratings and reviews prior to purchase decreases their likelihood to make a return.

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Aligning Your Returns Strategy with Consumer Wants and Expectations

Consumers expect flexible, free return options as 8 in 10 (81%) shoppers prioritize free shipping when making online purchases. Disregarding these expectations by charging for returns can have detrimental consequences as nearly 4 in 10 consumers (39%) would be highly likely to stop buying from online retailers that charge for returns.

A proven way to reduce the numbers of returns, and therefore the overall costs of returns, is to enable UGC – Q&As, rating and reviews, and visuals – that tells customers what they need to know before buying.

Conscious consumption is top of mind for consumers, and shoppers value sustainability in retailers’ returns and shipping processes. By proactively preventing returns from the get-go, companies can achieve even greater sustainability benefits.

By incorporating UGC into your product pages, potential buyers gain valuable insights from the experiences of other consumers. They can obtain answers to their questions, gauge product quality through ratings and reviews, and even visualize products through photos and videos. This wealth of information aids in making more informed purchasing decisions, ultimately minimizing the likelihood of returns, which not only reduces the environmental impact associated with return shipments, but also improves operational efficiency and customer satisfaction.