Returns from online shoppers is the new norm. While the returns are beneficial for the customer, the retailer faces serious challenges to ensure that the process is smooth and cost effective. Retailers have taken various steps to minimize the impact of returns on their bottom line and margins by defining the circumstances and items that are accepted as returnable.
The following are examples of products and categories that have been labeled as NON-RETURNABLE:
Another measure retailers have taken to limit returns is adjusting their return policies to be based on various parameters, such as:
There are various reasons as to why customers return items. These reasons help retailers not only understand why an item is being returned, they also dictate what happens to the item when it is sent back to the approved destination. Some examples of these return reasons are:
The most common reason for sales return is – defective product at 59%, followed by buyer’s remorse at 42%, and incorrect/incomplete product description of the product at 29%. The accuracy of these reasons can be questionable due to consumer preference, but they are crucial information for retailers to identify problems in their supply chain.
The top five product categories that show a higher propensity for sales returns than other product categories are:
Some consumer electronics products such as mobile phones, tablets and other gadgets are showing a return rate between 11% and 20%. In 95% of cases, the products were not defective and functioned properly. Studies showed that 27% of the electronic returns were because the customer was not satisfied with the product, exhibiting buyer’s remorse.
Clothing & Garments
An independent study says poor fit is the most common reason for sales returns for this category. This is primarily due to inconsistent industry standards for size and fit across brands. This results in an eye opening 20-50% of the product sales to be returned.
Food & Other Perishable Products
The food industry has become a victim of overwhelming customer returns, because of a variety of factors – such as product safety, degraded quality, perished items, and such. If one has to reduce sales returns, then one has to compulsorily follow regulatory and government standards, to maintain overall quality.
Toys and Baby Care
Industry standards and government regulations are constantly changing in this industry, and so are consumer expectations. Since the industry caters to babies and children, the expectations of the consumers (parents) are high and they expect superior value for money, which results in noticeable returns.
Increasing consumer expectations for quality and safety, have ensured that regulations in the sporting goods industry are constantly changing. Increased sales returns happen because manufacturers fail to keep up with the changes.
The retail space is constantly evolving. New paradigms, new products, new innovations, new enablers and more, are happening all the time. Retailers will need to be on their toes to keep in touch with the times and move with alacrity to gain the maximum benefit from the changing times. Different markets are in different stages of maturity when it comes to online shopping. So if you are shipping to the US, you absolutely need to know the nuances of the American market. It would be a good idea to partner with someone who understands reverse logistics and more importantly understands how to navigate the US market.