The Inovis Blog

As retailers prepare for the tidal wave of online orders and store traffic this holiday season, smart merchants are also planning for the backwash of returns.

And speaking of returns, a few interesting things are happening this year.First, retailers have loosened up return policies.

In a recent NRF survey, more than half (52%) of retailers say their return policies will be more lenient during the holidays compared to earlier non-holiday months of the year, up from 35 percent who said so in 2007. And three times as many retailers said they’re loosening return policies this holiday season compared to last holiday, rising from 3.4 percent of retailers to 11.0 percent.

Second, return rates are rising slightly this year, from 7.3% to 8.7% of sales.

(Note that returns for apparel retailers can reach twenty percent of sales, impacting one in five purchases.) I know what you’re thinking… “the higher returns are linked to the looser policies,” right? Not likely. In my experience working with retailers on return programs in a past life, there was no increase in return rates related to a more convenient policy. The more likely culprit driving up return rates is a rise in buyer’s remorse due to tighter household budgets and available credit.

Here are a few ways to make the “returns season” easy for retailers:

1. Make returns strategic. Your return process can make or break customer acquisition and loyalty, so manage it as an exec-level priority. 39% of consumers don’t buy direct due to return hassles. And 85% will NOT shop again if the process is inconvenient, while 95% WILL return if returns are convenient.
2. Make returns easy. Pre-paid labels (in-box and online) and email notifications are some basic capabilities to make returns easy for customers.
3. Make returns clear. The return policy must be simple and easy to find, particularly on the packing slip and the web site. A clear policy not only makes it easier for the customer, but also reduces call center traffic and handling exceptions.
4. Make returns automated. Print intelligent barcodes on your return shipping labels and scan them in-transit to fuel notifications (Advance Return Notifications, or “ARNs”) to distribution centers and customers.
5. Make returns efficient. As the last step in the process, make sure you quickly get returns to their final destination, whether that’s re-stock or liquidation. Partnering with third-party liquidators (liquidation.com) and aftermarket retailers (overstock.com) can be an efficient way to dispose of merchandise while maintaining the needs of brand and finance.

How is the economy impacting your return program?