Returns Unwrapped: Comparing Retailer & Shopper Perspectives

Convenience is Paramount for Shoppers

• Free return shipping is paramount, with 51.22% of shoppers ranking it as the most crucial factor in the returns process.
• Shoppers are increasingly opting to mail back returns (58.19% in 2024 compared to 28.6% in 2023). This shift, however, can be costly for retailers due to the lack of consolidated shipping options.
• Despite the popularity of online returns, in-store returns still hold value for shoppers. 47.74% of consumers consistently choose to return online purchases in-store. The primary motivator? Avoiding the need for packaging or labels (53.31%).

The Costly Reality of Returns for Retailers

• Returns cut into retailers’ bottom line, with a $100 item costing $30 to process.
• In 2024 alone, returns amounted to a staggering $743 billion. (NRF)
• More than half of retailers (54%) are actively searching for ways to maximize their financial recovery from returned merchandise.

Returns Fraud & Abuse: A Growing Concern

• Wardrobing, the practice of buying an item for a specific occasion and returning it afterward, has seen a significant uptick. 68.64% of shoppers admitted to this behavior, a stark contrast to the 30.42% in 2023.
• Bracketing, the practice of buying multiple sizes or colors and returning unwanted options, is also on the rise. This is particularly prevalent in apparel and accessories (56.41%).
• Retailers are responding to these behaviors by considering bans on customers who exhibit a history of wardrobing (38%) or bracketing (34%).

The Returns Fee Gamble

• To offset costs and deter excessive returns, 63% of retailers have implemented return shipping or restocking fees.
• However, shoppers are resistant to these fees, with 57.67% citing them as the most frustrating aspect of returns.
• This resistance has led to a surge in shoppers (75.44%) embellishing or exaggerating their reasons for returns to avoid fees.

Sustainable Solutions: A Win-Win for All

• 86% of retailers have implemented strategies to minimize the environmental impact of returns, including boxless, label-less returns and diverting gently-used goods to recommerce channels.
• 63% of retailers are either operating or considering launching secondhand channels to resell like-new or gently-used items.
• Shoppers are embracing recommerce, with 77% expressing a high likelihood of buying gently-used goods directly from brands at a discount.

Balancing Customer Expectations with Business Needs:

• Retailers are focusing on enhancing the customer returns experience (CRX) to foster loyalty.
• This includes improving online returns experiences (55.14%), in-store returns (48.86%), and omnichannel returns (41.43%) 
• Adding convenient options like home pick-ups and third-party drop-offs are also on the agenda