With the continuing rise of internet shopping, currently growing at 12% a year, many companies are offering free returns for unwanted items. As any business owner knows, there is no such thing as “free” in retail terms, and so it makes you wonder if a proportion of the returns cost has already been built into the price of the item (and every other item in the store). This would mean that anyone who purchases an item from the store is in fact paying a hidden premium to contribute to the cost of someone else having returned an item yet not bought anything.
It might be conceivable that a company could be gambling, say estimating that 60 or 70% of the goods will be kept. Whilst this might be true for high value items, such as washing machines, TVs, Laptops etc., the nature of purchases, such as online clothing, means that the customer may order 2 sizes of the same product and there is also a likelihood that they may just not like it.
Many retailers offer free returns. Could this be, as some online retail forums suggest, that the percentage of returns is lower from online purchases than purchases from bricks and mortar outlet? In a brick store, the showroom effect is more powerful, making the product look different to how it looks at home. Perhaps there really are less returns from online orders and less risk involved in making them ‘free’. We contacted a few of the biggest online retailers to see if they would shine any light on the debate; they declined to comment further than the standard information published on their websites.
Irrespective of company return policies and methods, it still stands that not everybody is going to return items. So why should those who don’t return items pay for those that do? Has the World gone mad or is this just consumer progress?
If you are a retailer and have any thoughts on this we’d love to have your comments below.
If you are in ecommerce and would like to know more about how DMC could help with fulfilment and returns please email@example.com