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Returns policies could make or break retailers this festive season

With Black Friday, Cyber Week, and Christmas all fast approaching, retailers are having to consider how they can create not just the best possible shopping experience, but the best possible returns experience for their customers.

Interestingly, 90% of consumers in the UK and US have said they will be cautious about shopping with a retailer that charges for returns this festive season, according to research from FarEye. Moreover, the survey of 1,000 consumers in the UK and US found that 50% of US consumers and 32% of UK consumers are not willing to pay for online returns.

Last year, around 61% of UK consumers and 51% of US consumers made returns during the festive months, and 53% of UK respondents can see themselves making returns this Christmas, while 48% are actively planning to return multiple items.

“Consumer expectations will no doubt remain high leading up to and around Christmas – one of the most profitable and critical revenue time periods for retailers. As retailers continue to simplify the last-mile delivery experience, they cannot forget about the returns experience. This too should be just as simple as the delivery experience,” said Kushal Nahata, CEO and Co-founder at FarEye.

Consumers are also looking for more flexibility. When it comes to returns windows, upward of 84% of US consumers and 82% of UK consumers expecting to be able to make returns between 30 and 90 days after a purchase.

Meanwhile, the ability to return items in-store or at a drop-off point is desirable to fair proportion of consumers. US consumers report returning items in-store 37% of the time, versus 35% in the UK, while post offices or drop-off points are used 31% of the time in the US and 44% of the time in the UK.

“Returns are a problem for retailers, costing on average, 66% of the total purchase price, yet the retailer doesn’t see any revenue from the purchase,” said Nahata. “Putting the cost on the consumer is not the answer, however. Retailers need to take a critical look at their returns strategy to drive down costs in ways that do not impact the consumer, like offering multiple drop-off locations for returns to reduce carrier costs and drive efficiency. These survey findings – while not surprising – reveal a mismatch between retailers’ plans and consumer expectations.”


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