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Do tighter returns policies backfire?
16 October 2024
RESEARCH SHOWS over half of consumers are deterred by strict returns policies, highlighting increased urgency for retailers to balance cost reduction with customer centricity, says Blue Yonder.
Its first European Consumer Retail Returns Survey, revealed 61% of respondents said a lenient returns policy significantly or moderately influenced their buying decisions. A majority of respondents also stated that tighter returns policies deterred them from making purchases.
Blue Yonder corporate vice president returns Tim Robinson, says: “Retailers have long acknowledged that they needed to tackle returns to reduce costs. With tighter returns policies starting to deter consumers from making purchases, the challenge now for retailers is to strike a balance between protecting their margins and maintaining a customer-friendly returns experience.”
Of consumers who are aware of stricter returns policies, 52% state that tighter returns policies are deterring them from making purchases. When asked about the tighter returns policies, 57% of survey respondents felt restrictions on returns are either inconvenient or unfair, with only 27% saying they were fair and understandable.
The returns process from the retailer’s side is costly, and many are now telling consumers to keep unwanted items to avoid the expensive and labour-intensive processes associated with reverse logistics. Almost half of consumers surveyed (40%) have been given this direction by a retailer. The top three categories this occurred in according to respondents were clothing & accessories (34%), electronics (21%) and home & kitchen (18%).
Offering a discount or incentive for a future purchase can persuade customers to keep items they might otherwise return. In fact, 47% of respondents said they are likely or very likely to keep a product if given such an offer, highlighting the importance of this strategy for retailers. When asked how much they would be willing to pay to return an item, 39% said €1 – €4.59, 11% said €4.60 - €9.15, 6% said €9.16 - €13.74, 4% said €13.75 - €18.30, while 27% said they would not return an item if there was a fee.
Third-party returns
With convenience and cost a greater consideration than ever, consumers are showing clear interest in third-party returns services (such as a drop-off location, mailing service, etc.). When asked what factors would make them use a third-party returns service, 40% of consumers said lower or no shipping fees, 35% cited the convenience of drop-off locations, 31% said faster refund processing, 31% cited assurance of hassle-free returns, and 29% said reliable tracking and confirmation of returned items.
A majority of consumers are dedicated to sustainable returns habits, with 53% saying they are very or somewhat concerned about the environmental impact of returning items. When asked what action they would take if they knew their returned item would go to a landfill, 25% said they would seek an alternative, eco-friendly disposal method, 34% would attempt to resell the item, and 24% would continue with the returns process as planned
For more information, visit www.blueyonder.com
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