FarEye today announced the results of a survey of 1,000 U.S. and U.K. consumers exploring expectations around the returns experience leading into the Christmas season, which found that 90% of U.S. and U.K. consumers will be cautious about shopping with a retailer that charges for returns.
The survey also found that 50% of U.S. consumers and 32% of U.K. consumers will not pay for an online return. These findings – amid reports of retailers looking to reduce the hefty cost of returns by charging consumers to return items – may result in lost customers and reduced brand loyalty.
Christmas returns are rampant
About 61% of U.K. consumers and 51% of U.S.consumers made returns during the months around Christmas in 2021, and 53% of U.K. consumers anticipate making returns this Christmas. The trend towards purchasing multiple items with the intention of returning some of those items contributes to the number of Christmas returns, with 48% of UK respondents admitting they plan to return multiple items during the coming Christmas season.
“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 Kushal Nahata, CEO and co-founder, FarEye. “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.”
The survey, conducted in November 2022, explored consumer sentiment around the returns process and its impact during Christmas. Additional findings from the survey include the following key areas:.
Consumers want returns flexibility
Consumers also want a lengthy return time period. Upwards of 84% of U.S. consumers and 82% of U.K. consumers expect to be able to make a return between 30-90 days from purchase. These results confirm that the inconvenience of a returns policy may ultimately stop consumers from making a purchase.
Convenience in return drop-off key
U.S. consumers are most likely to return an item in-store, which is an opportunity for the retailer to recapture lost revenue as the consumer is likely to shop while returning their item. U.S. and U.K. consumers report returning items in-store about one-third of the time (37% and 35% respectively) with a post office or drop-off point being another preferred method of return (31% and 44% respectively).
“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,” concluded Nahata.
