Retailers Rally for Reduced Returns
Between the spike in ecommerce – online retail sales will top one trillion dollars by 2027 – and increasingly relaxed return polices like in-store returns in 30 seconds; it’s no wonder return rates are spiking. Around $400 billion in merchandise was returned in 2017; up 70% from two years ago. According to UPS, these returns are costing retailers 20 to 65% of the cost of goods sold.
To help slow down returns, retailers are modifying their policies. A recent Bloomberg article covered some of the new strategies retailers are putting in place.
Lower Price in Exchange of Return Opt Out
The site Jet.com will give you a lower price if you opt out of its free return policy. If you change your mind later and want to return the item, it will cost you $5.99 plus 5% of the cost of goods.
Provide Better Sizing Information
To combat the trend of consumers buying three sizes of something with the intention of only keeping the item that fits, companies like Dockers.com are providing additional fitting details, such as inseam and thigh opening measurements for men’s pants.
Longer Return Windows
Best Buy will provide customers 30 to 45 days to return an item instead of the usual 15. The catch is, customers have to join a loyalty club and spend over $1,500 within a year (those who spend $3,500 a year get 45 days to return something). Not a bad incentive.
Shipping Deducted from Refund
To help stem processing costs, some online retailers will provide a prepaid return label that consumers can print and use on any box. Catch is, the shipping cost will be deducted from the consumer’s refund.
As we head into 2018, returns will continue to be a major pain point for retailers. While modified policies will certainly help offset some of the costs, retailers should still have a plan in place for the efficient handling of returned items. This includes doing the math on your remarketing channels: if done right, liquidation can often be the most efficient and recovery-generating path.
To learn more about how B-Stock’s B2B liquidation marketplace solution can help combat return rage in 2018, please get in touch with us.