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Returns Expected to Ratchet Up During COVID-19 and Beyond

Posted on August 04, 2020
Returns

When it comes to eCommerce, return policies are increasingly important to online shoppers. In fact, according to Invesp, free returns ranked only behind free shipping in the buying decision and outranked sale pricing, loyalty rewards, and gifts.

That’s why as more shoppers head online during the COVID-19 crisis to shop for everything from food to furniture, the number of returns is expected to swell as well, making them even more challenging for eMerchants to manage.

Even as stores re-opened across the country in many places, total U.S. online sales reached $73.2 billion in June, up 76.2 percent compared with $41.5 billion during the same period in 2019, according to Adobe’s June Digital Economic Index. And while that was a 11.3 percent dip in online spending from May’s $82.5 million, online sales are expected to continue to maintain holiday rush levels following the current crisis.

Considering that 30 percent of online sales are returned compared to just under 9 percent of brick-and-mortar sales, according to Invesp, the returns process is extensive and expensive for retailers even as we move out of stay-at-home orders.

Cost of returns beyond dollars and cents

In the U.S. alone, Statista estimated return deliveries will cost $550 billion in 2020, a 75.2 percent jump from four years earlier—and this was before COVID-19 boosted online sales volume.

While the financial impact of returns is the primary concern of most eCommerce players, there are other costs to returns than just shipping the items, restocking, and additional financial burdens eMerchants face.

As customers become more mindful of the environment, sustainable packaging and shipping are increasingly important in the purchasing decision, and this extends to the impact of returns as well.

Returns in the U.S. account for as much as 5 billion pounds of landfill waste and 15 million tons of carbon emissions every year, equaling the amount of trash produced by 5 million people annually, according to a Vogue Business report. Additionally, packing the outbound shipment more efficiently can cut down returns as a whopping 20 percent of consumers return products due to damage, much of which could have been eliminated with better packing.

While eCommerce returns are inevitable, keeping online shoppers happy during the process is vital to getting them to buy in the first place, and come back again. Here are three things to keep in mind when it comes to returns:

1. Your eCommerce returns policy should be clear, detailed, and easy to find

Whatever your return policy may be, it should be prominent on your eCommerce site. Be sure to let shoppers know the deadlines, costs [free?], procedures, and any other information early in the process, so there is no confusion before, during, and after checkout.

2. Automate the returns process

Automating your eCommerce returns can save a lot of time and effort. From informing the customer about the placed return request to printing the label to allowing them to track the returned item, automation will not only speed the process but reduce frustration for the customer.

3. Turn returns into an opportunity

When shoppers make a return, they end up back at your website to process it. At this point, you can offer store credits or specials that encourage the shopper to buy something new at a special rate, bringing the potential lost revenue from the return back to your bottom line. Even if they don’t buy at that point, a smooth returns experience can turn a negative into a positive – and repeat business.

As consumers increasingly continue to adopt online shopping habits, returns are bound to grow alongside them. Managing the process with a multi-carrier management solution such as Transtream, can not only cut down on returns but turn them into a positive experience when they do occur.

This article is exclusive to Pierbridge.com

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