A Deep Dive Into The Impact Of Retail Returns

A Deep Dive Into The Impact Of Retail Returns

Many retail organizations will make the mistake of thinking that they’re capable of eliminating all returns customers make. This is impossible. There will always be a mistake to be corrected, whether that be on the side of the customer or the side of the retailer. Instead of attempting to eliminate all returns, retailers should prioritize ways to slow them down or reduce them. This is accomplished through many different methods of retailers, most of which will be detailed in this post and the accompanying infographic.

One of the first methods for reducing the rate of customer returns is improving website conversion. Many customers make returns as a result of the products they receive not matching the images or descriptions provided on a retailer’s website. It’s only natural for customers to return an item that doesn’t appear to be the same as the images provided by the retailer. Which is why it’s so important to provide descriptions and images that are unedited and display the product as naturally as possible. Retailers should also provide additional sizing measurements, such as model height and weight, when displaying clothing as sizing accounts for upwards of 52% of all returns.

While it may seem counterintuitive, retailers see sale increases and return reductions as a result of their free shipping and free return policies. It’s only natural that a customer will purchase a good on a whim understanding that if they’re unhappy with it, they’re able to return it free of charge. This is a great method by retailers to encourage customers to purchase things they may not need but are pleased enough with that they won’t return them. In turn, this can increase a retailer’s sales and establish a relationship between retailer and customer.

The pandemic ensured that online shopping would see incredible surges, but the volume of orders that retailers would have returned to them was truly remarkable.  Over the course of 2020, retailers reported almost a 70% increase of returns compared to 2019.  As online shopping opened the door for new customer acquisition, it also posed retailers with unique scamming methods to protect themselves against.  Through “wardrobing” and “bracketing,” customers would purchase products online and hope to get a bit of use out of them prior to returning them.

While managing these scamming attempts was a challenge, retailers had an entirely different problem on their hands in the case of fraudulent purchases. Some of the worst customers are the types willing to purchase products from a retailer with a stolen credit card, then try to return the products in hopes of laundering the returned money onto their own credit cards. This is why it’s so important for retailers operating online to have the right anti-fraud tools in place. With these tools, the moment a stolen card is used to make a purchase, the retailer is alerted and protected.

Interested in learning more about how these anti-fraud tools can protect your online retailing business? For more information surrounding the partnerships between these providers and retail organizations, continue reading on to view the infographic accompanying this post. Infographic courtesy of Signature Payments.