Should Retailers Prioritize Return Strategies to Keep Consumers Happy?

Why it's worth the hassle, according to experts

The holidays are over, but the season of returns is just getting started.
Photo Illustration: Dianna McDougall; Sources: Getty Images

Thanks to online shopping, consumers can buy three different sizes and colors of one item to see which works best, all from the comfort of their own home. Add holiday sales and shipping incentives into the mix, and it’s official: ‘Tis the season of returns.

The volume of returns is so big that Jan. 3 is National Returns Day, the UPS’s unofficial holiday to ship back any unwanted products. UPS estimated in December 2017 that 1.4 million packages will be sent back on that day alone, adding in the same press release that returns are up eight percent from 2016.

Of course, returns will continue past that day, with the National Retail Federation predicting a “13 percent return rate for the 2017-2018 season.” And retailers who don’t offer a hassle-free return shipping policies are likely missing out. According to the NRF, 64 percent of shoppers who have issues with returns are “hesitant to shop at that retailer ever again.” According to Optoro, a tech company that helps retailers with returns, 46 percent of online shoppers leave behind a full cart due to a fee-based return shipping policy.

Companies need a strong return experience in an age where there are so many retail options for consumers, and experts say that retailers who focus on easy returns can hold an advantage over their competitors—particularly when online shopping, not just purchasing, is becoming increasingly common.

Thanks to Amazon making returns feel fast and easy, companies are slowly but surely coming around to an easier return process. FedEx boasts 8,200 return locations, while UPS has a whopping 27,000 sites in shops, lockers, and stores for customers to bring back rejected goods.

Meanwhile, retail giants like Walmart are attempting to perfect the return experience. The Mobile Express Returns program lets customers start the return process on the Walmart app before coming to the store to complete the exchange.

Amazon and Kohl’s teamed up to run a similar program, allowing Amazon customers to return “eligible Amazon products” at 82 stores in Los Angles and Chicago, free of cost. (It’s a perk that not even customers who shop online at Kohl’s get—the company doesn’t offer free return shipping on online orders.)

Other companies, however, haven’t jumped on the returns train. Forever 21’s policy only extends to within 30 days of the ship date of the product; Best Buy only permits customers to return most items within 15 days, rewarding its Elite and Elite Plus members a slightly cozier 30- and 45-day policy, respectively.

Online retailers like Etsy have a much higher burden to bear when it comes to returns. The onus is on Etsy sellers to provide a return policies (and any costs incurred). It’s why Etsy shop owner Maria Oliveira wishes the platform had a better way to handle returns and exchanges. “Unfortunately, unless the seller has really thought about the process, they could potentially lose a lot of money in accepting a return,” Olivera said.

However, returns are a burden retailers (and even sellers) should be prepared to handle if they want to become “exceptional,” according to retail strategist Kevin Kelly.

The companies that open their arms and welcome these returns exceed their expectations and strengthen the relationship with the client,” said Kelly. “When you celebrate returns, you gain that small competitive edge that will lead to customer loyalty long term.”  

Retail consultant Bruce Winder also thinks it comes down to matching your competition’s policies: If your competitor is offering free returns, you should do the same. However, Winder argues that paying for return shipping isn’t a viable business strategy. Instead, companies need to think about how to “incentivize people to bring products back to a store or store affiliate,” said Winder.

The returns piece is going to become something cost-prohibitive,” he explained. “Companies will eventually have to leave those customers out.”

One way to cut down on these costs is giving consumers the ability to virtually “try it on” before buying a garment. To Winder, it’s the company “forcing your customer to do the homework upfront to minimize the product coming back.”