Report: Return policies could hurt retailers this holiday season

As retailers look for ways to reduce the high cost of returned items this holiday season, there’s one method that should stay off the table: charging consumers for their online returns. That’s according to a report released this week by FarEye, which offers a software-as-a-service (SaaS) platform for delivery management. FarEye surveyed 1,000 consumers in the US and UK about their expectations of the returns process this holiday season and found that 90% said they would be wary of shopping from a retailer that charges returns. The survey also found that 50% of US consumers and 32% of UK consumers said they would not pay for a return. “These findings — amid reports from retailers trying to reduce the high cost of returns by charging consumers fees for returning items — can result in lost customers and reduced brand loyalty,” the company said in a press release company, in which the results are described in detail. FarEye co-founder and CEO Kushal Nahata added that retailers should look internally at ways to reduce high return shipping costs. “Returns are a concern for retailers, which cost an average of 66% of the total purchase price, yet the retailer sees no revenue from the purchase,” Nahata said in the release. “Putting the costs on consumers is not the solution, however. Retailers need to critically review their returns strategy to reduce costs in ways that don’t impact the consumer, such as: For example, offering multiple drop-off locations for returns to reduce shipping costs and increase efficiency. While these survey results are not surprising, they show a disconnect between retailers’ plans and consumer expectations.” The survey also found that high response rates will remain, reflecting recent changes in consumer buying behavior that have become permanent are. The report found that around 61% of US consumers and 51% of UK consumers made returns during the holiday season last year, and that 42% of US consumers and 53% of UK consumers expect to make returns this holiday season . The practice of buying multiple items online with the intention of returning some is a driving factor, according to the report, which found that nearly 30% of US consumers and nearly half of UK consumers admit they do so this holiday season to plan. Flexibility and comfort are also in the foreground in the returns process. For example, FarEye found that 84% of US consumers and 82% of UK consumers expect to be able to return within 30 to 90 days of the purchase date. In addition, both US and UK consumers indicate that they want to return items both in-store and at a post office or drop-off point. “Consumer expectations will no doubt remain high during the holiday shopping season — one of the most profitable and critical sales periods for retailers,” Nahata also said. “As retailers continue to simplify the last mile delivery experience, they must not forget about the returns experience. That too should be just as easy as the delivery experience.”

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