Retail returns: Stats reveal what consumers hate and how to tackle the problem

Retail returns are undesirable for obvious reasons: they mean both a decrease in revenue and an increase in costs. They also come with a sustainability impact as they add to your business’s carbon footprint through shipping, packaging, and even the potential waste of the product itself.

On top of these losses, returns also have an impact on your customers — how they feel about your brand, how they talk about your brand, and whether they’ll shop with your brand again.

Is your returns policy suitable for your business? What do your customers think of it?

Did you know that 88% of consumers stopped shopping with a retailer when it introduced a paid returns policy?

SAP Emarsys recently surveyed more than 2,000 shoppers in the United States to better understand the trends and sentiments around returns.

Let’s take a deep dive into the results and examine what they mean for retail businesses, as well as ways you can reduce returns and improve customer loyalty:

• 5 things consumers hate about retail returns
• 4 return policies that can boost customer loyalty
• 6 things consumers want from retailers to reduce returns

Retail returns: infographic

5 things consumers hate about retail returns

If shoppers could sit down with you and give you a list of the top things that are the most maddening to them about returns (not necessarily in regards to your brand, but in general), that list would likely look like this, according to Emarsys’ research into US shoppers’ preferences:

1. Returns: Yes, one of the primary things that shoppers dislike about retail returns is, frankly, the whole process of returns. 54% of shoppers indicated that they didn’t want to have to return items. Also, when receiving an unwanted gift, recipients indicated that they’re more likely to give it to charity, keep it, or regift it than they are to return it to the retailer. Plus, 52% say they’re likely to overlook minor issues with a product to avoid the hassle of returning it. That might almost seem comforting, until you realize that the flaw in question might just become an ongoing reminder to the customer of their dissatisfaction.
2. Mistakes: It isn’t shocking that 60% of shoppers said they’d like online retailers to get it right the first time. No one wants to order a blue lamp only to receive a yellow one in the mail. If a retailer is experiencing a high number of returns due to logistics errors, poor quality assurance, or other product issues, then sorting out the source of the problem will make for happier customers and more profitable business.
3. Return fees: 54% of respondents said that they actively avoid online retailers that charge for returns, and 49% are less loyal to brands that charge for returns. Additionally, 72% of shoppers say that when a retailer offers free returns, it increases their loyalty to that retailer. In regards to errors, when asked whether returns should be free only if the retailer is at fault, 21% of shoppers agreed and 47% disagreed, showing that shoppers are reluctant to yield free returns even if they know they goofed.
4. The introduction of return fees: If there’s one thing shoppers dislike more than a return fee, it’s the introduction of a return fee where there previously was a “free returns” policy. As noted earlier, a whopping 88% of consumers say they stopped shopping with a retailer because a paid returns policy was introduced. (Additionally, based on recent data from Happy Returns, which provides reverse logistics solutions, 48% of retailers reported an increase in customer complaints and a decrease in average order value after introducing return fees.)
5. Exclusive free returns: When asked whether they liked being a member of a loyalty club where only members get free returns, only 27% of shoppers agreed while 40% disagreed. When shoppers were asked whether they opposed retailers offering a loyalty club where only members get free returns, 39% of shoppers agreed, and 31% disagreed. When asked how being offered a premium subscription with free returns would impact their loyalty, 37% of shoppers said it would increase their loyalty, and 25% said it would decrease their loyalty. The responses seem to indicate that when it comes to setting up exclusive free returns, retailers should exercise caution because it may alienate some shoppers, or shoppers may dislike feeling pressured into joining the loyalty club.

Here are a few additional insights into consumer behaviors around retail returns:

• Return activity: Despite their distaste for the hassles of making returns, 86% of shoppers say they’ve returned items over a 12-month period.

• Wardrobing: 23% of consumers admit to “wardrobing” — buying items with the intention of returning them.

• Low-cost items and returns: 46% of shoppers said they don’t bother to return items that are under $10.

Ultimately, brands need to think about how returns fit into the bigger picture of the entire customer journey, from end to end. For that, your data needs to be connected from end to end in a customer data platform. A CDP becomes the bridge between the customer data you collect and the systems you use behind the scenes (like a customer engagement platform), so you can provide better and more personalized experiences.

4 return policies that can boost customer loyalty

You’ve surely already gotten the impression that return policies and the entire return experience impact customer loyalty.

Here’s what shoppers say are the return policies that help increase loyalty to a retailer:

1. Free returns policy (72%)
2. Fast return service (66%)
3. Extended returns deadline (64%)
4. Sustainable returns process (55%)

This list doesn’t hold any surprises. Each one of these policies favors the customer’s convenience at the expense and/or effort of the retailer. What’s helpful here is the order of the list — it’s clear that shoppers make free returns a top priority.

In fact, being able to return items at no cost is such a priority to shoppers that it even influences what channels they use.

When we asked shoppers whether they sometimes avoid shopping with online retailers because they charge for returns, 54% agreed.

Retailers that are e-commerce only should keep this in mind, because a return fee may drive customers into the arms of competitors that have physical locations.

Returns are just one part of the larger customer loyalty mix. To dig deeper into what’s currently driving customer loyalty, check out our 2023 Customer Loyalty Index report. We surveyed 10,000+ consumers (from the US, UK, Australia, and Germany) to gauge their sentiments about loyalty in today’s economic climate.

6 things consumers want from retailers to help them avoid returns

Retail returns are a challenge for both customers and retailers. Customers would like to get the quality product they desired in the first place and avoid hassles and especially any return fees, and retailers would love to preserve their revenue and reduce expenses.

Yet returns are also an unavoidable reality of commerce. Eliminating returns altogether simply isn’t an option.

But don’t be discouraged! In our returns research, we investigated what shoppers want from retailers to help them avoid returns in the first place:

1. Better personalization: 41% of customers say they’d like to see more personalized recommendations and deals from retailers. Using intelligent CX, retailers can help guide customers to the product they need at the right time, on the right channel, and with the right price point that’s aligned with their spending habits. With your customer data unified in a customer engagement platform, you can use AI help to anticipate customers’ needs and continuously optimize each engagement.
2. Virtual try-ons: 42% of shoppers say they’d like the ability to try on clothes virtually. This is a great way to help bridge the gap between online and in-store shopping experiences. Speaking of which, 51% of shoppers say they would return fewer items if the online experience were more like shopping in-store. Offering the ability to try on clothes virtually is a great way to help customers make a more informed decision based on style, color, and other details.
3. Augmented reality: Many shoppers have at least heard of or used augmented reality at some point. 36% of shoppers say that being able to see items in their homes via augmented reality would help make online shopping more like in-store shopping. By letting your shoppers use their mobile phones to better visualize the placement of an item, they’re more likely to be satisfied with the end result.
4. Free in-store returns: As we’ve seen, customers hold return fees for online orders in contempt, and they’re willing to go to physical stores to avoid those online return fees. This spells opportunity for retailers that have both online and physical stores. If you charge a fee for returning purchases made online, consider enabling your customers to avoid that fee by returning their online purchase to you in-store. This strategy also helps with sustainability. (56% of shoppers agree that retailers should take returns at local depots to improve sustainability.)
5. More visuals: 36% of shoppers would like to see more visuals of the product. Retailers should ensure that they show the product at scale by placing it in context, such as in a room or on a model. Consider adding an interactive 360-degree image of the item that the customer can spin, or add a short video of the product being used.
6. Greater accuracy: Shoppers showed a consistent preference for details that clarify size and/or fit of what they’re purchasing. 36% of shoppers want specificity regarding a product’s fit (i.e. regular fit, small fit, etc.); 36% want sizing charts stating the retailer’s size compared with other stores; and 36% want retailers to list the model’s measurements. Online retailers must accurately and clearly represent products so customers know what they can expect. Plus, as your customer shops with you, you have the opportunity to learn more about them and collect behavioral data. The customer data you gather can then help you to further tailor their customer experience.

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Reducing retail returns is great for customers + retailers

The most important thing you can take away from this data is that we’re all in this together. Business and customers and even our planet are in agreement: returns are undesirable, and we want fewer of them.

By tailoring experiences to customers and putting emphasis on their satisfaction, retailers have the opportunity to not only decrease costs and preserve revenue, but also to drive greater customer loyalty.

Data and personalization are truly your most powerful weapons in the ongoing battle to reduce returns. By using a customer engagement platform to help guide customers to the right products, on the right channels, at the right time, you can help reduce returns and put more smiles on your customers’ faces.