A more recent trend in the eCommerce world is the reality of the serial returner. Free returns can entice people to buy multiple items with the intention of returning only the items they want to keep. For example, someone might buy three pairs of the same jeans in different sizes just to find the one that fits best with the sole intention of returning the other two. This is a costly practice for retailers who have to pay the shipping and handling for the returned items.
Retail Sales & Sales Return Figures
The National Retail Federation (NRF) states that total (B&M and E-Com) retail sales in USA are expected to cross $ 3.8 trillion in 2019. A US eCommerce 2019 report states that in 2019, e-commerce retail sales in USA, would be $ 586.92 billion, representing 10.7% of total USA retail spending. B&M retail will account for 89.3%, driving 55% of retail growth, while e-commerce will drive a disproportionately high percentage of growth at 45%. NRF reported that in 2017 itself, USA shoppers returned an astounding $ 351 billion worth of items purchased from B&M and E-Com stores.
Returns Are The New Normal
A survey by Narvar (2018) and Return Magic, on e-commerce returns, threw up these astonishing results.
- 41% of the shoppers buy variations of a product with the explicit intention of returning it.
- 42% of the shoppers have returned an online purchase in the last six months.
- 89% of the shoppers have returned an online purchase in the last three years.
Another report revealed that –
- More than 40% retailers have seen an increase in “intentional returns”.
- 44% retailers say margins are strongly impacted by handling and packaging returns.
- 70% retailers expect margins to be squeezed even more as the practice intensifies.
- The worst offenders are young shoppers aged 18-34 years.
- 22% of these shoppers confessed to intentionally buying more than they intended to keep.
Returns Are Costly
The cost heads of returns include –
- Shipping costs – delivery and returns logistics.
- Handling and Packaging costs.
- Labor costs.
- Inventory management costs.
- Loss of value of the returned product – depending on condition of the product and packaging.
- Back office cost of tracking, implementing and fulfilling the returns and refunds process.
Types of Serial Sales Returns
Serial sales returners of online sales typically fall into two broad categories:
- Buy, Wear & Return: These shoppers cannot afford the product or take advantage of some lenient return policies. They buy and wear them wear once, and return the product.
- Buy Many – Pick n Choose: These shoppers purchase different variations of the same product, pick their favorite, and return the rest, essentially mimicking the brick-and-mortar experience.
Isolating Serial Sales Return Shoppers
Retailers need to single out these serial sales return shoppers by identifying and isolating them, using processes such as –
- Shortlisting the suspected serial shoppers.
- Observing and investigating the suspected serial shoppers.
- Identifying the critical repeat shoppers.
- Isolating the serial shoppers with strategies/policies such as –
- Restrict Full Service: Exclude them from services such as – discounts, free shipping and returns.
- Ban the Shopper: Alternatively, the retailer may ban the shopper. For example, Amazon has banned critical serial returns shoppers. Smaller retailers are also either planning to or have banned critical repeat serial returns shoppers.
- ‘Try-On-At-Home’: The shopper is allowed to buy the product, take a trial at home, and then decide if you want to keep it or return it. This may be a costly option.
- First Replace & Then Return: Ensure that returned product is picked up only after the shopper buys again, using the credit given to the shopper for the return. This reduces the risk to the retailer and also ensures that customers get their replacements.
More such strategies/policies will surely evolve over time to counter the serial returns shoppers.
You can connect with ReturnsUSA, for all concerns regarding reverse logistics in the US market. ReturnsUSA offers an optimum blend of solutions that scale to fit any size and volume of operations.