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A small price to pay for returns?

A small price to  pay for returns?

A small price to pay for returns?


Should you make customers pay? Its benefits are obvious and in response to our survey more than a third (37%) of respondents said they felt that they were great for building trust and basket size. For many retailers free returns are simply a no-brainer. “We find that paid returns detracts customers from ordering in the first place. It is definitely an enabler,” says Vinesh Chauhan, logistic carrier manager for department store giant Debenhams.

At fashion retailer Warehouse digital merchandiser Liam Price says that free returns are core to the company’s strategy. “Free returns are an integral part of our service proposition and something we know our customer expects when shopping with us,” he says.

Indeed he believes it can be demaging to a brand to charge a customer. “A customer returning an item means that something isn’t quite right, so it’s our responsability to make the experience as positive as possible to ensure we ratain the customer as a loyal shopper,” he says.

“We see a lot of companies that have grown successfully by offering free returns such as ASOS who offer free delivery and returns worldwide. In my opinion it’s something that’s extremely desirable to consumers and great way for boosting confidence for someone to try a brand they’ve not tried before,” says Hermes sales and marketing director Gary Winter.

But the offer of free delivery comes at a bigger cost for the retailer since they are expensive to handle and need to be built into margins.

In the survey one in five respondents said they offered free returns somewhat grudgingly – saying that they were expensive and encourage customers to over order with the very intention of returning product that isn’t suitable, but that they have to offer them.

As company that facilitates returns Winter says Hermes has to cover all bases with the services it offers to retailers. “Some retailers are extremely keen to promote that they offer free returns but then you have others that really would not like to have a returns so we have to ensure we have solutions that cover that spectrum of attitude,” he says.

Our research showed that many retailers offer free returns sparingly. Just under a third (31%) of respondents said they offered free returns on all their sales and nearly half (44%) said they offered free returns on up to 25% of their sales. An additional 9% offered free returns for 26-50% of their sales and 16% on between half and three quarters of their sales.

At catalogue retailer Boden customers service manager Peter Hutton says the company has increasingly used returns tactically as a marketing tool to increase sales. “It goes out as a part of the offer – usually via mail. We then attach an offer code to the catalogue too,” he says.

Hutton says the tactic works well. “Some of the bigger retailers use free returns as a blanket tool but once you are in the higher end of the market somehow you pay for free returns in the original purchase. Others are more reluctant to take the hit of free returns at all. Nearly a third (31%) of respondents said they weren’t suitable for their business and therefore they didn’t offer them. A further 9% said that they only used them as a tactical marketing tool whilst 3% of respondents said that fro them the cost of free returns outweighed their benefits and therefore they were looking to reduce or phase out the use of free returns within their business.

At jewellery online retailer CEO Clive Billing questions why retailers need to pay for returns at all. “I’d be very upset if we gave money back on postage back to us because I believe that a transiction is a mutual thing” he says. “You can’t drive back to M&S and say here’s my petrol receipt,” he points out.

Opinion it seems, remains divided.

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