Sales, Shmales; Return Policies Could Define This Holiday Season

By Bryan Pearson | Dec 05, 2017

A distinct message is arising from the purr of retail traffic this holiday, and for merchants paying close enough attention it is this: Delivery is a two-way street.

Retailers expect shoppers to return 13% of purchases during this holiday season, according to the National Retail Federation (NRF); that’s up from 8% in 2015. However, even more shoppers — particularly online shoppers — are choosing where to buy based on how easy it is to return an item, or deliver it back.

Two-thirds of shoppers review an online merchant’s return policy before making a purchase, according to research by UPS, and 15% abandon their carts when the policy is unclear.

These deserted carts represent more than unrealized sales; they also stand for the next big make-or-break feature for retailers: the return experience. From Wal-Mart to a startup by former Nordstrom executives, more merchants are finding opportunities to stand apart in the return process, by elevating it from a necessary evil to a recognized asset of the purchase experience.

Bellying Up to the Return Bar

Perhaps the most innovative concept in transforming the return experience springs from a standard-bearer in customer service: Nordstrom.

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Happy Returns, co-founded by former Nordstrom executives David Sobie and Mark Geller, operates a network of “return bars” where online shoppers can bring items purchased from a variety of participating brands, including Everlane, Paul Evans, City Chic and Mizzen and Main. The service, available in partner malls and stores in 14 metro areas, is free and does not require receipts.

Sobie, Happy Returns’ CEO, said a September survey of 1,800 shoppers shows the return process is a barrier to sales, especially online. “Twenty-eight percent of shoppers say that they shop online less than they would otherwise because they don't want to deal with the hassle of returns,” he wrote in an email.

Of the same shoppers, 73% said the return experience is their least favorite part of online shopping.

What do shoppers want in a return experience? For online purchases, they want free returns, immediate refunds and no required printing, he said.

Or they prefer to make their returns in the store. Case in point: Six months after Nordstrom launched a program that allowed shoppers of its brand HauteLook to make returns at Nordstrom Rack stores, 75% of HauteLook returns took place there, Sobie said.

Wal-Mart, Apple Also Improving Return Options

Most brands that operate physical and digital showrooms, such as DSW, Best Buy and Macy’s, allow shoppers to buy online and return in store. However, operating an online-only entity whose purchases can be returned at a brick-and-mortar sister brand is different: It opens opportunities for added sales by encouraging the return traffic. Retailers can learn from this.

Here’s what a few other merchants are offering to make givebacks less daunting.

Return to technology: Several apps, including Slice and ReturnGuru, make the return process easier by managing receipts and sending expiration warnings. Wal-Mart, however, decided to make its own app. Its Mobile Express Returns, launched in October, enables shoppers to enter the information required for a return. They then can make a breezy transaction in designated express lanes at the store.

Extensions: Major brands including Amazon and Apple have lengthened their return deadlines for the holidays. Amazon’s normal 30-day return period is extended to Jan. 31, 2018, for purchases made from Nov. 1 to Dec. 31. Apple extended its return policy on most products bought from Nov. 15 to Dec. 25 to Jan. 8, 2018. Typically, its items have a 14-day return window.

Prevention: Getting the gift right means never having to say, “I don't have a receipt.” CheckedTwice.com, an online gift registry for families, offers a holiday registry that should cut down on returns before a purchase is even considered. Using Pinterest-like displays, the registries group together the wish lists and gift suggestions of all family and friends. Members must opt in or join to participate, and the service is free.

Return to Vendor, Approach Unknown?   

Whether extensions and preventions soothe the pain points of returns remains to be seen. What is essential is that the policy enables the shopper to comfortably shoehorn a return into the course of a regular day. This is becoming a crucial factor for landing sales, particularly those of large-ticket items.

And if nothing else, this little fact should resonate with retailers: Shoppers who plan to make a return may also expect to do a little extra shopping. According to research by UPS, 70% of online shoppers made an additional purchase when returning an item to a store; 45% bought something extra when making a return on the retailer’s website.

Retailers are overdue in re-engineering the return policy into an integral part of a good retail experience, and those who ignore this will lose sales. A gift return could represent a shopper’s last encounter with a brand, or it could be the first. Good merchants will let a good return experience generate returning shoppers.

Article was originally published here.