Convenience and Refund Speed Rule Consumer Sentiment Around Holiday Returns
Meghan Hall
4 min read
For consumers, the best gift brands and retailers could give them this year may be convenience.
Though reverse logistics often pose issues for brands and retailers—particularly those with a major e-commerce presence—they remain an inevitable piece of many consumers’ shopping journeys, particularly during holiday season. As value-conscious consumers scour stores and the web to get their shopping done this season, optionality around returns will be key, new data from Narvar and Reshop shows.
But the returns process begins for many consumers before they ever click, “Buy.”
With 46 percent of shoppers saying they typically return more items during the holiday period than they do throughout the rest of the year, brands’ return policies seem to be more important than ever to consumer purchasing decisions.
When shopping, 83 percent of consumers said they always or sometimes check on the company’s returns policy before purchasing. As they consider the return policy, eight in 10 consumers said having optionality around how they return products—whether it’s in a store, at a UPS location or otherwise—impacts their decision to purchase items from a retailer or brand.
Katie Pridham, chief commercial officer at Reshop, said meeting the consumer where they are—whether that’s near their home, close to their office or otherwise—could make a difference for brands who play their cards right this holiday season.
“Today’s consumers demand convenience, seeking to maximize time and money when shopping online. To capture their attention and loyalty, retailers need to stand out by offering speed and post-purchase optionality. With $743 billion in returns last year alone, there’s a massive opportunity for retailers to recapture revenue and turn potential losses into profits, especially as consumer habits continue to evolve,” Pridham told Sourcing Journal.
Consumers also indicated free returns are important to them; nearly half of consumers said they avoid shopping with brands and retailers that they know do not offer free returns. That may be partially attributable to consumer sentiment around inflation and pricing; three-quarters of shoppers said they feel concerned about having enough money to purchase gifts this holiday season, so adding shipping or returns fees on top of an already strenuous season may seem unappealing for many.
Pridham said that, if one retailer or brand doesn’t meet a consumer’s desires, shoppers know they can often find the benefits they seek elsewhere, so catering to the consumer without sacrificing too much profit on the company side is paramount to success.
“People will ultimately select brands that can accommodate the flexibility they desire so they can shop and return in ways that make the most sense for them during the holiday season,” she said.
That’s especially important in highly saturated consumer markets, like fashion and apparel, which, according to consumers’ input, may be one of the top-ranking sectors for gifts this year.
Nearly seven in 10 consumers said apparel items would be part of the gifts they purchase this year. However, that could signal an increase in returns for brands and retailers in the fashion space; Narvar data from June shows that apparel accounts for about half of all returns made from online purchases.
In addition to having solid choices around where to return items, consumers also indicated they prefer to have multiple options for how they receive a refund for returned items. Six in 10 consumers said having options for receiving a refund would increase their likelihood of shopping with that brand or retailer again in the future.
Refund speed also plays a role in consumers’ decision-making processes. Some retailers offer store or online credit instantly, rather than processing a refund back to a consumer’s original form of payment over the course of days or even weeks.
But increasingly, consumers are demanding less holdup when it comes to their funds; three-quarters of all surveyed consumers said receiving a faster refund would increase their interest in repeat shopping with a brand or retailer.
“Enhancing the customer experience and creating more opportunities for sales is critical. 75 percent of shoppers say they’re more likely to make repeat purchases from a retailer that offers fast refunds, creating a huge opportunity for retailers to seize. Reshop taps into this insight by quickly restoring customers’ purchasing power, allowing them to reinvest with the retailer. The faster the refund, the quicker customers can repurchase, ultimately boosting sales and retention,” she said.
Though they put retailers in consumers’ good graces, instant refunds can be a difficult process to sort out for many retailers, with some worrying about returns abuse and fraud. Pridham said that Reshop, which boasts partners like Steve Madden and Alo, can help mitigate issues like that.
“Fraud can have a significant impact on a retailer’s bottom line. With Reshop, we take on the risk associated with offering instant refunds for our merchant partners, so it’s easier for brands to hone in on the focus areas that keep customers coming back. Reshop’s proprietary risk algorithm enables Reshop to build a trusted customer base, helping identify fraud while rewarding the successful use of Reshop services,” she said.
