More Online Purchases Often Equals More Returns — Here’s How Retailers Can Keep Up

E-commerce growth has allowed retailers to make up some of the sales they lost through store closures, but it has also increased the likelihood of returns.

For both newcomers and veterans of online selling, adjusting returns policies to the current environment is a valuable opportunity to enhance the consumer experience.

Shopping online can see return rates as high as 30%, according to industry estimates, as consumers don’t have the ability to try on product or see it in-person before purchase. And the consumer experience for each of these returns is critical; returns solutions provider Optoro found that 97% of shoppers said they would continue to shop at a brand they had a positive experience with, while a bad experience would deter 89% from ever coming back.

Even companies with a previously successful policy might want to reassess their terms. Traditional returns policies usually set a time limit of up to 30 days and require printed labels or a visit to a store. But these could all present issues to consumers — and retailers — right now.

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“Offering flexible return policies helps alleviate the increased amount of mail-in returns that retailers are facing,” said Larisa Summers, SVP of marketing at Optoro. “By creating a wider returns window, retailers can spread out any spikes over time and build long-term customer loyalty.”

Summers suggested retailers consider doubling the returns window or offering a 30-day window from when physical stores re-open. Alternatives to printed labels include mobile codes that can be scanned at the drop-off point for consumers without access to a printer.

At Narvar, another returns solution provider, executives are observing a shift towards curbside service for both delivery and returns. Many logistics networks are already experiencing delays due to the volume of outbound shipping; an increase in returns creates more burden on the infrastructure. Allowing customers to drop off items in person can increase speed and also comfort for those wanting to avoid busy postal centers.

A screenshot of Narvar returns solution in place at Levi's
Narvar can help facilitate returns for retailers, including through store drop-off or mail channels.
CREDIT: Courtesy of Narvar

It is also a way for retailers to maximize inventory capabilities. Consumers who drop-off curbside can more easily exchange items, based on store inventory, while returns can be quickly redeployed for future orders; they might otherwise get stuck at a processing center.

“It’s an effective measure to utilize existing storefronts — or in some cases partner with other retailers with an active footprint — for e-commerce fulfillment,” said a spokesperson for Narvar. “Shoppers are looking to consolidate shipping trips and services during this time, so retailers who provide alternative returns drop-off points or curbside pick-up options will gain favor with customers long term.”

For retailers unable to introduce new returns channels, industry experts agree that communication can go a long way. In addition to sending regular updates to consumers at each stage of the returns process, Narvar recommended that companies provide general broadcasts of widespread delays, either on e-commerce pages or through brand messaging.

At Optoro, the emphasis is on communicating with logistics partners and processing services. Existing protocols are likely to be more burdened than before, so regular check-ins may be needed to optimize efficiency and reduce the financial hit of returned items.

“Retailers need to ensure they are effectively communicating with distribution and processing centers in order to route items to the appropriate secondary channel,” said Summers. “Mitigating inefficiencies here will lead to a quicker resale turnaround time, ultimately minimizing financial waste.”

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