Returned Goods Have $350B Impact on E-Commerce

Woman on laptop and mobile phone holding shoes purchased online

With consumers buying more items online than ever before, retailers are also seeing increased returns. E-shoppers are now purchasing sight unseen based on their confidence in an effortless return process — and confidence in a company or brand is quickly eroded if they encounter difficulties making returns.

Simply put, digital consumers expect to make returns. Some 41% fill their carts with items online shopping planning to return items once they have confirmed fit or tried out the item.

Making returns easy for customers is a simple way to earn repeat business, according to Narvar’s 2018 Consumer Report. Some 96% of the 1,300 online shoppers surveyed said they would shop again with a retailer offering an “easy” or “very easy” return process. The majority of the report’s respondents felt that returns were getting easier, and only 5% complained of greater difficulty than the year before.

Consumers returned $350 billion of goods last year, and Happy Returns projects that number will reach $550 billion by 2020.

Why are consumers making returns? According to Voxware:

  • 21% didn’t like the item
  • 21% found it to be poor quality
  • 10% received the item too late
  • 18% received damaged or previously used items
  • 19% returned due to incorrect size or color
  • 11% ordered or received the incorrect item

E-consumers review return policies before even adding items to their carts. According to Narvar:

  • 69% are deterred by paying return shipping
  • 67% of shoppers are put off by restocking fees
  • 17% will only purchase if they can make in-store returns
  • 40% found it easier to return to a store

Over 4 billion pounds of returned apparel ends up in landfills annually, as the cost of restocking items is prohibitive.

What Retailers Can Learn From Returns Research

In a more positive finding for retailers, 87% of respondents exchanged or replaced the returned item. This represents an opportunity to reclaim revenue and, with an easy exchange policy, keep customers loyal.

In fact, a late 2017 survey found more than half of American shoppers would avoid shopping at retailers with strict return policies in place. Brick-and-mortar shoppers, in particular, wanted to get a full refund, with 37.9% saying that this was the most important factor in deciding where to shop. Digital shoppers agreed; 33.6% identified getting a full return as a key returns-related concern.

Knowing that 31% of consumers have kept products they didn’t want just to avoid the hassle of returns, there are several key takeaways for retailers:

  • Offer visibility into return and refund status
  • Make it possible for consumers to return items without contacting the company for authorization
  • Communicate clearly with shoppers when they make a return
  • Get it right the first time — 40% of respondents in Voxware’s study received an incorrect item a second time as well
  • Provide convenience above all else to luxury shoppers, who are less deterred by fees

The Importance of An Easy Return Process

Ultimately, returns are a key component of the consumer’s overall shopping experience and impression of your brand. Ensure that your business is doing all that it can to offer a straightforward, transparent returns process with clearly communicated policies that work to alleviate shopper anxiety.

Your returns policy can have a real impact on whether a customer returns to your business or not, so it’s crucial to create a well-thought-out, easy process that puts purchasers first.

Image Credit: goodluz /

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