New research from Barclaycard suggests that retailers are being left with unsellable stock simply because they are being too lenient with their returns and refund policies, opening the system to abuse from customers whilst poor returns delivery processes are also putting other customers off returning goods.
The survey, of both consumers and retailers, showed that more than half (57%) grant refunds regardless of product condition in order to maintain a positive relationship with their customers. And yet, with faulty or damaged stock excluded merchants estimate that a quarter (26%) of those goods refunded are not fit for resale. The results showed that 48% of items returned had been used, 29% were marked and 28% had bits missing.
Why charging for returns is not the answer
So what can retailers do? Many – four in ten according to the Barclaycard survey – admit to not offering free returns as a way to discourage such a problem in the first place since if customers have to pay for returns they are less likely to go to the bother of returning a product. A further 12% of those retailers surveyed said that they had stopped offering a free returns service because it proved too expensive for them to operate.
But the failure to fully accommodate returns – despite their potential expense and hassle – can have a huge impact on business. In a survey of consumers also carried out as part of the report more than a third (36%) said that they would be put off shopping somewhere if there was a charge to return items by post or courier.
Indeed it seems this was even more important than quick delivery or online customer support, according to the survey.
Customers want choice
Things are complicated yet further by a desire from customers for the very best in returns policies. Almost half (49%) wanted retailers to provide multiple options to enable them to return items; 46% wanted refunds instead of credit notes and 40% wanted a long window for returns.
The survey also looked at shoppers who had bought something that they had meant to return in the last twelve months but hadn’t done so. It showed that 17% of shoppers had kept items they had never used and failed to return with clothing top of the list for 55%, shoes for 30% and kitchen gadgets for 17%.
The biggest reason for failing to return an item was missing the returns window defined by the retailer for 44% of respondents. 39% said it was too much hassle to return and 22% were put off by the cost of returning an item.
“In the 21st century, where we can buy as much as we please at the touch of a button, shopping is no longer just a necessity, it’s a well-loved hobby,” said Sharon Manikon, customer solutions director at Barclaycard. “Retailers are faced with the difficult task of ensuring they can manage the influx of returns which comes hand-in-hand with online and impulse shopping, without compromising their bottom line, or their relationship with customers,” she said.
“Our research demonstrates that offering a good returns policy can help retailers attract and retain customers. However, it’s also crucial to be clear on when customers can and can’t return items to limit the amount of unsellable stock. This will be particularly important in anticipation of major shopping events such as Black Friday, when retailers are likely to see a spike in sales and, subsequently, returns.”
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