While COVID-19 imposed a great deal of challenges on many retail organizations throughout these past two years, there’s one particular challenge that will linger long after COVID subsides: retail returns. Unfortunately it can be difficult for any retailer to discern whether the return is their own fault or the fault of their customers, which can truly make correcting the mistake that much harder. Regardless of the nature of the return, it’s imperative for retailers to prioritize developing ways to both identify the types of returns they face in addition to strategies to help limit the amount of returns they do have to deal with. Throughout this post, a number of the types of returns faced by retailers and the strategies they can use to minimize these returns will be detailed.
Beginning with the most basic reason for a return, customers will not hesitate to return a product that they ordered that fails to match its description or product images on a retailer’s website. While it’s clear that this is grounds for a return, sometimes customers will attempt to take advantage of return policies even if the product does match close enough to their expectations. Minimizing the number of these returns starts with reducing the amount of disingenuous descriptions or pictures on any product page. The most important element of these descriptions and photos is for customers’ to see which sizes would fit best, but this can be challenging online. Which leads to nearly 52% of the return rate that retailers face.
As mentioned previously, many retailers’ have very forgiving return policies for their valued customers. Couple this with the free shipping both ways and it’s easy to see why customers may shop on a whim knowing they can always return a product if they don’t love it. Though it may seem counterintuitive, this is actually beneficial to many retailers. Many customers will purchase a product expecting to return it but end up loving it and keeping it. This can increase a retailer’s sales and can help establish a relationship between retailer and customer.
While COVID-19 limited the possibilities of physical returns, online retailing continued to move the needle. However, with more online shopping also means additional online returns. Over 2020, retail returns have seen a 70% year-over-year increase. This return frequency, while alarming, is made much worse when considering the fact that some customers are abusing retailers through different scam attempts. Wardrobing and bracketing attempts allow customers to order every variation of a product to briefly use and then return it as though it were new and never worn. Retailers must invest additional capital to solve these issues, because if they’re undefended against these types of attacks, these fraudulent attempts can elevate to tougher crimes to deal with such as money laundering.
Scamming is certainly troublesome, but retailers have much more trouble dealing with fraudulent purchases. These fraudulent purchases can be done through a stolen credit card, and customers will proceed to try to return the products in hopes of laundering the returned money onto their own credit cards. If retailers with high performing online marketplaces are unprepared with anti-fraud tools, their customers will pay the price which can sever the relationship between the retailer and them.
No retailer should ever feel like they have to be taken advantage of by some distrusted customers. In order to feel more prepared for the many fraud or scam attempts that your customers can put your retail organization through, be sure to read on to the infographic paired alongside this post for more information. Courtesy of Signature Payments.