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The role of returns in service, stock and cost control


With some sectors, particularly fashion, experiencing a returns rate of around 50%, and the overall volume of returns now about to enter its peak period, the question of how to deal effectively with returns remains one of the industry’s thorniest of issues.
The growth of ecommerce saw lots of attention on, and investment in, front-end technologies and services; from the basic ability to transact, through to tracking customers, and plenty more besides. Logistics has long been the Cinderella of the piece, but even that is a simplification that doesn’t tell the whole story.

Delivery and collection have become the rock stars of the ecommerce sector. Want to buy a TV online at 5:30pm, and watch programmes on it later that very same evening? You got it. Want SMS alerts telling you what time your delivery is due? Easy. Want that dress you ordered to be available at the station you commute to and from? No problem.

Choice and convenience in delivery and collection are the new black, to borrow a well-worn cliché.

Returns… not so much.

Order processing and parcel data management company, NetDespatch has just published a report looking into the problem of returns, canvassing the opinions of the 130,000 or so users of the NetDespatch platform.

It found that nearly half of respondents (48%) said they have returned an item in the past year. Of that, 28% had returned between 1% and 10% of goods, while 7% had returned between 11% and 15%, and 7% had returned between 16% and 50% of purchases.

On average women were more likely to return goods than men with 31% versus 25% returning between 1% and 10% of the things they’d bought.


When asked what returns locations or methods the respondents have used, the top three were:

  • 78% – the Post Office
  • 43% – waiting at home for a courier to collect
  • 39% – local convenience store returns point (ie: Collect+, Hermes Shop)

The chief reasons for returning items were the usual suspects – faulty or item not fit for purpose (76%), wrong size (66%) and product doesn’t match description (47%).

Almost one third (31%) of those surveyed said they would only purchase from retailers who have a free returns policy. Over one sixth (17%) were only interested in purchasing from retailers that make returns easy (described as meaning there’s a returns label in the box, packaging is provided, or there is online label printing and an online request for courier, etc).

One fifth (20%) claim that they would only purchase from a retailer that has a free returns policy and also makes it easy to return goods.

Almost one third (32%) said they would purchase from a retailer regardless of whether returns are free or easy. This percentage was slightly higher for men (35%) than women (30%). The younger generation (16-24 year olds) are looking for free returns policies (36%) and easy to use returns policies 45%, the research found. Despite this clear emphasis on ease and convenience, however, when asked if an increased number of returns methods had encouraged them to return more items, 88% said not, and only 12% said it would.

Cross-border shopping is still seen as something potentially problematic; 57% said they have different returns expectations when purchasing overseas as opposed to the UK – 36% expect it to be more expensive, 31% expect it to be more complicated and 30% expect it to take longer to return online items.

The bump in the road where returns are concerned is that it is the part of the process least likely to have been wrapped into an over-arching sense of service provision, NetDespatch’s commercial director Matthew Robertson told eDelivery. “One of the things we found was that even though some retailers might offer a variety of returns options, they don’t always make them very obvious; customers are left feeling like they have to do a lot of digging to find the information they’re looking for. This is an important part of the service, but retailers need to ask themselves whether they’re putting in enough effort in.”

The NetDespatch research also found that when returning an item to a store, nearly half (48%) admitted that they are likely to purchase other items while there, presenting an opportunity for those retailers able to incentivise in-store returns.

More research into the topic of returns comes from Clear Returns, which predicts returns generated from Black Friday alone will cause £160m of stock to be sent back, risking the creation of a ‘returns loop’ during the critical Christmas sales period, leading to stock shortages. This, the company claims, will reach its apex on 12 December, which it is calling Out of Stock Saturday.

The Clear Returns report also suggests the cost of handling returned goods from this year’s Black Friday will cost retailers over £130million, rising to £180million once lost margins, cleaning and storage of products, and lost customer lifetime value are factored in.

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