New Happy Returns study highlights how
retailers are updating return policies to positively impact their
bottom line
SAN
JOSE, Calif., Oct. 18,
2023 /PRNewswire/ -- According to the third annual
"Returns Happen" study released today by Happy Returns, the
popularity of in-person box-free returns is growing even
stronger—with 67% of consumers ranking in-person returns
as the No. 1 preferred return option, up 26% from last year.
In addition, 90% of consumers say they avoid or refrain
from shopping with retailers who offer mail returns as their only
return option.
This increase in the preference for in-person returns is driven
in part by retailers introducing or raising return fees, as they
attempt to regain lost profits from the growing number of returns.
According to the study, 81% of retailers started charging for
at least one return method in the last 12 months. The
results of these new fees have been mixed, with some
retailers experiencing negative impacts on sales and customer
satisfaction, and others finding ways to shape their return
policies to drive customer loyalty while reducing costs.
"We continue to see retailers seeking out new ways to
mitigate the negative impact of returns on their business,
while still meeting the needs of shoppers and maintaining customer
loyalty," said David Sobie, VP and
Co-Founder of Happy Returns, a PayPal company. "This year's study
shows that now, more than ever, retailers can achieve this balance
by offering in-person, box-free returns across an extensive network
of locations, with real-time item validation and immediate
refunds."
The 2023 "Returns Happen" report surveyed 2,000 consumers and
200 enterprise retailers to understand evolving attitudes and
outcomes around returns. Here's what the study found:
The Impact of Return Policies and Fees
For retailers,
return fees can be a double-edged sword. While 53% of retailers who
increased return fees saw a reduction in return rates, 48% of these
retailers reported a decline in average order value and an increase
in customer complaints. Additionally, one in three retailers
claimed they had lost customers as a direct result of adding return
fees.
Amidst New Return Fees, Consumers Desire Choice
What
consumers want is choice, and preferably, a free return option. Of
the retailers who implemented new return fees, 59% said they saw an
increase in shoppers choosing the free return option they
offered.
Other Factors Influencing Return Behaviors:
- Consumers consider return policies when purchasing: More
than 80% of consumers check a retailer's return policy before
making a purchase with a retailer for the first time and 55% of the
consumer population surveyed have abandoned a shopping cart if the
return policy wasn't convenient.
- Location and proximity drive in-person return adoption:
Consumers are more willing to make a return if it's at a nearby
location to them with 94% of shoppers surveyed willing to travel up
to 2 miles, and 82% up to 5 miles for an in-person return.
Furthermore, 68% of shoppers are more likely to shop with a
retailer that offers in-person returns at convenient, nearby
locations.
- In-person returns can help combat return
fraud: An overwhelming 99% of retailers identify
return fraud as a significant issue for their
business. This is defined as the act of returning merchandise to a
retailer for a refund in violation of the retailer's return policy.
Among the myriad strategies explored, one way that retailers are
finding success is by requiring each item to be individually
scanned and verified before a refund can be issued, as Happy
Returns provides at its Return Bar network of more than 10,000
locations.
To read the full report including advice for retailers, visit
here.
Methodology
The survey was conducted by TRC,
commissioned by Happy Returns, with fieldwork administered by
Forsta. The survey sampled 2,000 U.S. consumers who returned an
online purchase within the past year and 200 U.S. senior-level
merchants with revenue of $500
million or more. The consumer survey was fielded from
August 15 to August 21 and the
merchant survey was fielded from August 16
to August 22 through a quantitative online survey with an
overall margin of error of 2% (n=1,980).
About PayPal
PayPal has remained at the forefront of
the digital payment revolution for more than 20 years. By
leveraging technology to make financial services and commerce more
convenient, affordable, and secure, the PayPal platform is
empowering hundreds of millions of consumers and merchants in more
than 200 markets to join and thrive in the global economy. For more
information, visit https://www.paypal.com.
Media Contact
Nikki Ziolo
Nziolo@paypal.com
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SOURCE PayPal, Inc.