Blue Yonder, the world leader in digital supply chain transformation, today released the findings of its first European Consumer Retail Returns Survey, which examines how consumers across the continent are experiencing and reacting to increasingly stringent returns policies. Notably, the findings reveal the importance that most consumers place on returns policies, with 61% of those surveyed acknowledging that a lenient returns policy significantly or moderately influences their buying decisions. A majority of respondents also stated that tighter returns policies deterred them from making purchases.
“Retailers have long acknowledged that they needed to tackle returns to reduce costs,” said Tim Robinson, corporate vice president, Returns, Blue Yonder. “With tighter returns policies starting to deter consumers from making purchases, the challenge now for retailers is to strike a balance between protecting their margins and maintaining a customer-friendly returns experience.”
Tighter returns policies deter buyers
Of consumers who are aware of stricter returns policies, 52% state that tighter returns policies are deterring them from making purchases. When asked about the tighter returns policies, 57% of survey respondents felt restrictions on returns are either inconvenient or unfair, with only 27% saying they were fair and understandable.
Returns frequency and common causes
Over half the survey group (60%) reported making a return only once or twice a year or less. Other responses included 13% who make a return every few months, 4% once a month, and 2% every couple of weeks or more. One fifth (20%) said they have never returned an item.
In addition, 51% of respondents cite the most common reason for returns is incorrect sizing. Other reasons cited by respondents include item damage at 42%, followed by receiving the wrong product (27%) and changing one’s mind or disliking the item (19%).
The cost of returns: who pays?
The returns process from the retailer’s side is costly, and many are now telling consumers to keep unwanted items to avoid the expensive and labor-intensive processes associated with reverse logistics. Almost half of consumers surveyed (40%) have been given this direction by a retailer. The top three categories this occurred in according to respondents were clothing & accessories (34%), electronics (21%) and home & kitchen (18%).
Offering a discount or incentive for a future purchase can persuade customers to keep items they might otherwise return. In fact, 47% of respondents said they are likely or very likely to keep a product if given such an offer, highlighting the importance of this strategy for retailers. When asked how much they would be willing to pay to return an item, 39% said €1 – €4.59, 11% said €4.60 – €9.15, 6% said €9.16 – €13.74, 4% said €13.75 – €18.30, while 27% said they would not return an item if there was a fee.
Third-party returns
With convenience and cost a greater consideration than ever, consumers are showing clear interest in third-party returns services (such as a drop-off location, mailing service, etc.). When asked what factors would make them use a third-party returns service, 40% of consumers said lower or no shipping fees, 35% cited the convenience of drop-off locations, 31% said faster refund processing, 31% cited assurance of hassle-free returns, and 29% said reliable tracking and confirmation of returned items.
“Where the goal is to mitigate the cost of returns, retailers should be looking for ways to do more than tightening their policies to reduce returns rates,” said Robinson. “Gathering data and automating intelligent decision-making for every return will bring costs down through more efficient transportation and reduced waste without impacting the customer experience. That data is also incredibly valuable to reduce returns rates, helping retailers to see the patterns of which items are returned, by which customer segments and why, and to act accordingly.”
Sustainability plays a factor in returns
A majority of consumers are dedicated to sustainable returns habits, with 53% saying they are very or somewhat concerned about the environmental impact of returning items. When asked what action they would take if they knew their returned item would go to a landfill, 25% said they would seek an alternative, eco-friendly disposal method, 34% would attempt to resell the item, and 24% would continue with the returns process as planned.
