Is this the end of free returns?

By 5th June 2019November 4th, 2019Digital Strategy, Ecommerce
Free returns

With the cost of return rates from eCommerce sales currently around double what they are in stores, it comes as no surprise that retailers are being forced to re think their strategy.

Customer expectations of next day delivery and free returns has had a bittersweet (albeit expected) effect on retailers pockets – driving online sales up to all time highs by providing minimal effort shopping. Yet the cost of returns, handling and packaging is estimated at triple the cost of sending it out in the first place.

So What are retailers doing about it?

In 2018, retail giants Amazon announced that they would start to implement lifetime bans for “serial returners” who repeatedly return their purchases using the free service provided.
Using analytics to collect data and track recurring patterns in customers accounts, Amazon will stop doing business with anyone they begin to lose money with (the return limit being undisclosed as of yet)

Asos controversially followed suit at the beginning of this month, in a bid to ensure a more ‘sustainable’ returns process, by blacklisting or even deactivating it’s customers accounts using a similar tactic. Customers’ money will not be withheld, rather they will be blocked from making any further purchases.
Claiming that many people were buying new outfits for the weekend, wearing items and returning them the following week, the crack down has had some unwelcome feedback from it’s most loyal of customers. Many have cited the inability to comment or review items as the main reason for returning. As a pure play retailer, Asos continues to receive criticism for it’s inconsistency in sizing, which in effect, results in many items being ordered in the wrong size. This in return yields a high rate of returns.
The move comes as a potential risk to business as Asos lose the faith and trust of its customers.

What other tactics are being used?

Other companies have tried to tackle the issue in other, less drastic ways with H&M trialling a new policy that see’s customers in Canada unable to return online items in store- instead having to pay for their own postage.
The deterrent approach comes as a good mid-way compromise between mickey taking compulsive returners and total ostracisation, however the fence will fall down when a fault or discrepancy with an item lies with the retailer.

Want to know way more?

Our omnichannel retail software partners, Brightpearl have produced a full in-depth report around the issue which you can (and definitely should) view here.