Many (79% of shoppers under 30 to be exact) find returns to be a cumbersome undertaking. Consequently, brands and retailers are implementing seamless return procedures to create a pleasant customer experience. This approach is crucial as the holiday return season is underway.
Recent data from the National Retail Federation reveals that last year, shoppers returned 16.5% of items purchased online and in stores — an increase from the 2019 return rate. In light of this, retailers are expected to shift their focus from showrooms to stockrooms, addressing the influx of returned goods.
This issue has become bigger in recent years, especially during the pandemic, as shoppers became accustomed to ordering items in various sizes and colors and returning those they didn’t want.
“We’re heading for a trillion dollar problem here,” Tom Enright, a retail analyst at research firm Gartner, told WSJ last month.
He said businesses forfeit about half of their profit margins due to returns, factoring in the expenses associated with both selling the item and handling the return process.
Read more: Retailers Wrestle With ‘Trillion Dollar Problem’ of Returns
With that in mind, retailers are getting more tactical about how they approach returns.
The shipping and mailing company Pitney Bowes introduced a returns drop-off network in collaboration with PackageHub.
According to the company, the network enables cost-free returns without the need for a box or label at nearly 1,000 locations, and there are plans for hundreds more to be launched soon across the country.
“We have the longest-standing eCommerce returns service in the industry — and now, with the launch of this network with our partner, PackageHub, we have access to their network of premium drop-off locations across the U.S., making this the most comprehensive returns service, capable of lowering the cost of returns while simultaneously improving the consumer experience,” said Gregg Zegras, executive vice president and president of global eCommerce at Pitney Bowes, in a company announcement.
Through the partnership, Pitney Bowes and PackageHub enter into competition with Amazon, as both now provide label-free and box-free returns without any associated costs.
Read more: Pitney Bowes Takes on Amazon With PackageHub Returns Partnership
Then there are retailers who are looking to do away with returns completely by simply telling customers to “keep it.”
In fact, according to data from returns services firm goTRG, the adoption of these policies has risen to 59% among retailers, a significant increase from the 26% reported last year.
Read more: Retailers Adopt ‘Returnless’ Policies to Cut Costs and Boost Satisfaction
Some retailers opt to impose return charges on customers who are not members of their loyalty program, while providing free returns for loyal customers. H&M is one such retailer, as reported by PYMNTS, and this strategy is designed to enhance their loyalty program.
In order to stay competitive and incentivize increased customer spending, retailers have embraced the strategy of providing complimentary shipping. As revealed in a study conducted by PYMNTS and sticky.io titled “Subscription Commerce Readiness Report: The Loyalty Factor,” 42% of survey participants said the absence of free shipping would be a significant reason for them to cancel their retail product subscriptions. This percentage surpassed the proportion of respondents citing any other reasons for subscription cancellations.
Read more: Will H&M’s New Return Fee Drive the Loyalty It’s Looking For?
Then there’s retailers who look to Uber and ReturnQueen to make returns easier on their customers.
With Uber’s returns service, after users select a nearby carrier and confirm the pickup, Uber will send a courier to collect the package from their location. The courier will deliver the package to a nearby U.S. Postal Service, UPS, or FedEx facility. Users can track their package’s real-time progress through the app. After the drop-off, the courier will provide a visual confirmation or a photo of the receipt.
Read more: Consumers Fuel Uber’s Newest Return Service
With ReturnQueen, customers can schedule a pickup service for their packaged returns at a flat rate of $7 per pickup, regardless of the number of packages or the retailer. This service is designed for prepackaged boxes with attached labels.
Moreover, ReturnQueen provides a membership program allowing customers to pay a monthly subscription fee of $19. This membership grants them unlimited pickups from a range of retailers. Alternatively, customers have the option to choose a $99 annual membership, which also includes unlimited pickups from any number of retailers.
Read more: ReturnQueen Founders Are on a Mission to Make Returns a Brand-Building Experience
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