Is it the end of the era of free returns?
Huge online businesses like ASOS are now charging for return items for certain customers. Jen Pollard, Data Analyst at Visualsoft, digs into the reasons behind the switch, and what you can do to reduce your rate of returned items.
The return of the return fee
From the 8th October, ASOS are charging £3.95 for returning orders under £40 for certain ‘high frequency return’ UK customers. That’s a lot of caveats, and the reason may be that charging for returns is taboo for a lot of shoppers, especially those shopping online.
ASOS aren’t alone in their move. BooHoo, JD Sports, Next, New Look, and Pretty Little Thing, as well as many others, are all moving in a similar direction. H&M have also introduced free returns as part of their membership package, and even ultra-fast fashion brand Shein only gives their customers one free return for a single item, with a £2.50 charge to return any extra items in the same order. With international shipping under increasing pressure, and shoppers’ budgets shrinking due to the cost of living, there are many reasons why brands have slimmed down or stopped giving free returns.
What are the big issues affecting free returns?
Increased costs in packaging, taxes on plastics use, and items being returned that are deemed unsellable all mean retailers are somewhat reluctant to take returns. But charging for returns does make customers more considerate in their shopping habits, put off by unexpected charges at the checkout. This can take shoppers to the point they may not make the purchase at all, or are more calculated in their purchasing rather than impulse buying. This doesn’t necessarily mean that online businesses are doing worse, as they’re no longer absorbing the cost of items no longer sellable, and the cost of transportation for returns.
Warehousing and storage is a big problem. A lot of businesses simply don’t have large areas to store and process returns. Returned items can be taking up valuable space that could be housing products that make profit. Transportation and the general cost of damaged items being returned can often lead to large write offs that are difficult to absorb. Returns processes can become inconsistent due to workforce constraints, leading unhappy customers who will think twice about shopping with a business again. There is also the environmental concern over emissions and landfill waste when dealing with returns. It is estimated that more than 80% of clothing returns end up in landfill due to being out of season, damaged or just not resellable. This isn’t just limited to the clothing industry. Technology sees about 40% end up in landfill, or items going into liquidation sales.
Why do customers return items?
One of the most common return reasons is an item not meeting expectations. When customers order online they only have the images of the item. While there is little you can do to mitigate this, clear descriptions can help fill in the gaps for customers. Damaged or defective products are another heavily cited reason for return. This could happen in transport if the item isn’t protected well enough, or could have been damaged by whoever received the item. Neither of these can be proven easily, and most businesses in the UK will have to legally accept the return of these items due to the Consumer Act 2015.
Incorrect fit is another one high on the list of returns reasons. With the shift from shopping at brick and mortar stores, this is one that will plague clothing and footwear retailers as items cannot be tried on before they’re bought. Despite efforts to combat this issue, such as ASOS’s aforementioned returns charge, the fact that items can’t be tried on has seen a rise in shoppers purchasing multiple sizes/colours/styles and returning the ones they don’t like or don’t fit.
What can you do to reduce returns?
You could have a ‘no returns’ policy but that could easily put shoppers off straight away, however, there are some simple tactics that you can employ to help reduce returns:
- High quality pictures of products from as many angles as possible
- Informative descriptions
- Introduce sizing guides
- Reduce the need to purchase multiple sizes
- Ask customers to review items to give credibility and reward them for doing so
- Ensure that correct items are sent and appropriate packaging is used to reduce damages in transit.
How can you prepare your returns policy for the peak shopping season?
Making sure your returns policy is robust is the first step. Ask questions like: does it give clear guidelines? Is it clear on processing times? Do any potential costs affect customer expectations? Also, allocating an area in your warehouse or premises to handle returns, as well training staff specifically to process them, can help your business deal with a potentially higher returns volume.
Returns will inevitably affect many online businesses, but at a time when shoppers are being more careful about how they spend their money, what they do spend has to be deemed worth it. Making it easier for shoppers to understand everything about your products, and easier to visualise them on themselves, in combination with a well thought out returns policy can help reduce the costs returns can incur, and hopefully you can introduce, or continue to offer free returns to your customers.
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