The Latest Threat to Online Commerce

Between the spike in ecommerce – online retail sales will top one trillion dollars by 2027 – and increasingly relaxed return policies 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.

Now, on top of consumer returns, major online retailers are in the public eye for combating return fraud. Attention grabbing headlines declaring that Amazon is now banning customers for too many returns have been making the rounds; but the truth is a bit more tame: Amazon is revoking Prime memberships for accounts that are committing return fraud.

“We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time,” [an Amazon] spokesperson said in an email. “We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers.”

In addition to combating return fraud and to help slow down returns, retailers are modifying their policies. In late 2017, a Bloomberg article covered some of the strategies retailers are putting in place. More recently, the headlines have been dominated by Amazon and their approach to fighting back against fraud.

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.

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