Meeting Customer Expectations for Online Returns

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The vast majority of online retailers focus on consumer shipping expectations. Consumers are willing to pay more for same-day or faster delivery – according to PwC (member firm of PricewaterhouseCoopers International Limited), they “prize fast, flexible and reliable service.”

However, with National Returns Day just around the corner, are retailers caught up to consumers' expectations for fast and free returns?

Expectations for online returns are increasing and are not far behind those for online purchases themselves. In fact, 80% of customers expect to be able to return purchases for free.

To meet these expectations of a good return policy, brands are moving towards an increased number of returns processing locations, closer to the consumer, to lower cost and improve the customer experience.

Returns are notoriously labor intensive and costly processes for retailers, and return abuse is a concern for even the largest retailers. In fact, retailers such as Land’s End, Victoria’s Secret, and Neiman Marcus experience return rates in excess of 30%. In 2017, returns cost the retail industry $351 billion.

After last year’s holiday shopping season, UPS processed approximately 6 million return packages in the first week of January alone. In total, retailers saw about $90 billion worth of goods returned last holiday season.

For retailers, this means approaching their returns strategy and the customer return experience with the same level of consideration as their fulfillment strategy and the customer purchase experience.

While the labor-intensive returns process leaves a small margin for optimization past a certain point, implementing a returns processing strategy that includes multiple locations can expedite the shipping process with shorter transits from the consumer to a returns center, shortening the returns cycle time.

With online shopping now the norm for consumers (particularly millennials and gen z), creating a good return policy with free shipping and returns as a part of the purchase experience is expected. The question is— how will retailers keep up?