Tighter returns policies threaten European consumer spending: Survey

Close to three-fifths (61 per cent) of European consumers said a lenient returns policy significantly or moderately influences their buying decisions, according to digital supply chain transformation platform Blue Yonder’s first European Consumer Retail Returns Survey.

Of consumers who are aware of stricter returns policies, 52 per cent said that tighter returns policies are deterring them from making purchases. When asked about the tighter returns policies, 57 per cent of survey respondents felt restrictions on returns are either inconvenient or unfair, with only 27 per cent saying they were fair and understandable.

“Retailers have long acknowledged that they needed to tackle returns to reduce costs,” said Tim Robinson, corporate vice president, returns, Blue Yonder.

Sixty-one per cent of European consumers said a lenient returns policy significantly or moderately influences their buying decisions, a Blue Yonder survey found.
Of consumers who are aware of stricter returns policies, 52 per cent stated that tighter returns policies are deterring them from buying.
Fifty-one per cent cited incorrect sizing as the most common reason for returns.

“With tighter returns policies starting to deter consumers from making purchases, the challenge now for retailers is to strike a balance between protecting their margins and maintaining a customer-friendly returns experience,” he said in a company release.

Over half the survey group (60 per cent) reported making a return only once or twice a year or less. Other responses included 13 per cent who make a return every few months, 4 per cent once a month, and 2 per cent every couple of weeks or more. One fifth (20 per cent) said they have never returned an item.

In addition, 51 per cent of respondents cited incorrect sizing as the most common reason for returns. Other reasons cited by respondents include item damage at 42 per cent, followed by receiving the wrong product (27 per cent) and changing one’s mind or disliking the item (19 per cent).

The returns process from the retailer’s side is costly, and many are now telling consumers to keep unwanted items to avoid the expensive and labour-intensive processes associated with reverse logistics.

Almost half of consumers surveyed (40 per cent) have been given this direction by a retailer. The top three categories this occurred in, according to respondents, were clothing and accessories (34 per cent), electronics (21 per cent) and home and kitchen (18 per cent).

Offering a discount or incentive for a future purchase can persuade European customers to keep items they might otherwise return. In fact, 47 per cent of respondents said they are likely or very likely to keep a product if given such an offer, highlighting the importance of this strategy for retailers.

When asked how much they would be willing to pay to return an item, 27 per cent said they would not return an item if there was a fee.

With convenience and cost a greater consideration than ever, consumers are showing clear interest in third-party returns services like a drop-off location and mailing service.

When asked what factors would make them use a third-party returns service, 40 per cent of consumers said lower or no shipping fees, 35 per cent cited the convenience of drop-off locations, 31 per cent said faster refund processing, 31 per cent cited assurance of hassle-free returns and 29 per cent said reliable tracking and confirmation of returned items.

“Where the goal is to mitigate the cost of returns, retailers should be looking for ways to do more than tightening their policies to reduce returns rates,” added Robinson.

Fibre2Fashion News Desk (DS)