Consumers say retailers shouldn’t ban serial returners from shopping with them, suggesting that those who return the most are often the most valuable, highest spending customers to the retailer.
KPMG now estimates returns represent a £7billion problem for retailers – an issue that is only going to escalate further as inflation increases the cost associated with reserves logistics, and the processing and labour needed to remerchandise a returned product ready for resale.
And, as the latest data from the British Fashion Council shows, this isn’t just impacting retailers’ profits, but is also having an increasing impact on the planet, with an estimated 23million returned items destroyed or sent to landfill each year in the UK, generating 750,000 tonnes of CO₂ emissions.
According to research of more than 1000 UK shoppers by the Retail Technology Show, the average British consumer now returns 15% of the total number of items they buy online, rising to 20% for Millennials and 22% among Gen Z shoppers – explaining why the thorny issue of returns remains a key challenge for retail businesses.
This has led to many retailers, including Zara, Next, boohoo, THG-owned LookFantastic and Mountain Warehouse, to start charging shoppers to send items back, prompting a consumer backlash from shoppers who have become used to free returns. Appinio’s latest study, for example, shows 71% of UK shoppers won’t now shop with brand and retailer who don’t offer free returns, while Klarna’s poll showed getting rid of free returns risked lost loyalty with 86% of consumers more likely to come back to online merchants who offer free returns.
Some brands, including ASOS and boohoo, have gone further in waging their war on returns and reportedly started sending warning letters to customers deemed to be ‘serial returners’, reserving the right to suspend shoppers’ accounts. However, Retail Technology Show’s research showed currently just 6% of UK shoppers said they have been banned from shopping with a brand for being a serial returner, rising to 15% of Gen Z.
Almost a third (32%) of UK consumers say retailers shouldn’t ban serial returners, rising to 44% of Gen Z, while a further three in ten (31%) said retailers shouldn’t ban serial returners if they kept some of their order. Over a quarter (26%) said that rather than banning a serial returner, the retailer should take responsibility for preventing the return in the first place, while a further 27% said retailers should do more to understand why an item was being returned, rather than simply blaming – and in some cases banning – the shopper.
Almost a quarter (23%) said that shoppers who returned the most were often the highest spenders, warning that retailers could be losing loyalty and repeat custom if they banned serial returners. However, 35% did concede retailers did have a right to ban serial returners, due to the cost of returning an item and processing a return, and 24% agreed retailers should ban serial returners if they exhibit size sampling behaviours, where they buy the same item in multiple sizes.
Matt Bradley, Event Director for the Retail Technology Show, says: “Despite much debate on the best way to tackle the issue, it’s clear that retailers still haven’t squared the circle when it comes to returns. Retailers are looking at ways to address the spiralling operational costs associated with returns on the one hand – and where the responsibility for paying for that lies. Yet, on the other, they are also having to weigh up the cost of potential lost conversions, Customer Lifetime Value (CLV) and loyalty from shoppers who have been conditioned to expect returns to be free.”
