Here’s why returning items is more important to your business than you think

“The receipt is in the box if you don’t like it.”

“No, don’t worry, it’s great, I really like it!”


“Thank you.”

3 hours later…

Now where’s that receipt?

Sound familiar? It’s a conversation that’s bound to take place at many a household in the coming weeks as Christmas gifts are exchanged and people find new ways to say something they don’t like, is, in fact, rather lovely.

It’s not limited to this time of year, either. Birthdays, bah-mitzvahs, baby showers, graduations, anniversaries, the list goes on. All of these occasions and rituals that we find ourselves wrapped up  in with our loved ones mean a bad gift is never too far away, nor is a slightly awkward exchange about a beautiful new lemon zester from Aunty Kath.

Although as consumers we think nothing of returning unwanted items to retailers, for retailers, returns are a big deal. Here’s we’ll take a closer look at why a good returns policy could be a game changer for retailers by looking at three things:

The rising number of returns

Customer loyalty & increased sales

The advantage for stores


There’s no getting around this one; whilst online retail and the vast network of logistical operators now working around the globe has increased, so too has our propensity to be dissatisfied with what we have and to demand that that dissatisfaction be rectified.

Digital transformation in retail means we can shop on our phones or on our tablets, or even on our smartwatch, all from the comfort of, well, wherever we happen to be. Retailers’ doors are always open, so to speak. At least, their digital ones are.

This means shopping has increased, and so too has the number of unwanted items we now own. Writing in the Wall Street Journal, Laura Stevens wrote that in 2014, the US Postal Service expected to deal with as many as 4 million returns during the first full week of January, up 15% from 2012. Since then, of course, online sales have surged and we’re inevitably looking at even more this time around.

And that’s just the postal service. Delivery services also get in on the action, with Wired reporting that at the back-end of 2015 UPS“saw the highest volume of returns it expects to see all year, with people sending back more than 5 million gifts and impulse purchases.”

With that number on the rise year on year, it’s vital that retailers keep up with customers give them what they want, which leads us nice to our next point.


With the vast number of choices for consumers, it’s getting harder for retailers to really leave their mark and get the same kind of loyalty one might have got in the pre-internet shopping era. So how do returns make that loyalty a possibility?

The Huffington Post revealed that “over 63% of consumers read the online product returns policy before making a purchase” and that some stores “get 75% improved customer loyalty, repeat buyers from free returns.” That’s a lot more customer loyalty for something that, in the grand scheme of things, is common sense.It’s not rocket science to know that people want easy returns policies. But did you know, for example, that, as CNBC reported, offering free returns can boost sales by 357 per cent? That’s a big number. It might be worth taking a closer look at that returns policy again and if it isn’t free, it could be worth an investment.


Whilst online retailers work to make their returns as painless as possible for both themselves and the consumer, the process is much easier for stores and smoother for customers. With the growing demand for easy returns, this should prove a boon for physical retailers.

The same Wall Street Journal article cited earlier also notes that “the return rate for online purchases is about three times as high as for items bought in stores, where shoppers can try on and test their choices.”

Similarly, Wired point out online retailers could find themselves in a somewhat paradoxical cycle whereby “easier returns leads to more online shopping, which leads to more returns.” On one hand they offer consumers what they want in the form of easy returns, but it comes at the price of investing heavily in making that process quick and easy.

Physical shoppers, on the other hand, have the advantage of trying on their items, seeing them and even potentially trying them before buying them, thus lessening the potential for returns.

However, that’s not to say returns in store needn’t be analysed. Writing in Entrepreneur, Jenifer Goforth Gregory says “having an employee posted outside your store looking for customers carrying bulky packages for returns inside” could provide an extra incent.

Give to keep customers coming back, something online retailers can’t provide.

So what’s the overall message then?

Returns are vital for both customers and businesses, and that’s only going to continue being the case in the future. Be sure to review your returns policy, as we now know, that’s exactly what consumers will be doing.

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