Consumers Say Hassle-Free Returns Are More Important Than Ever

Shoppers are making buying decisions based on retailers’ return policies, according to a new consumer research study. Free returns are important to shoppers when making an online purchase, and a majority of consumers check a retailer’s return policy before deciding to buy.

Shoppers prefer making returns in-person

Consumers now rank in-person, box-free returns as the number one preferred method for online returns, while mail-in returns have dropped to the fourth-ranked position. “Customers are feeling return fatigue with a broken and outdated model of sending back returns through the mail,” said David Sobie, vice president of Happy Returns. Mail-in returns require printing a return label and finding packing materials; they often include a trip to a USPS, UPS, or FedExFDX
location. Almost half of the shoppers surveyed do not have continuous access to a printer that can be used for printing return labels. Consumers also prefer box-free, in-person drop-off at a retail store over a free home pick-up option.

Only 21% of surveyed consumers prefer to pack up items and schedule a pick-up compared to 54% that prefer in-person drop-off at a designated retail location. Sobie stated, “Consumers are losing patience with this process because they understand that there is a better and more hassle-free way to complete returns, like taking products directly to retail locations that offer in-person returns onsite.” Based on the survey, mail-in returns are a thing of the past: 79% of consumers try to avoid mail-in returns whenever possible, and this number skews higher for those under the age of 30 (83%).

Returns are an Achilles heel for consumers and retailers

Returns have become an even more significant part of the shopping journey, partly due to consumers making purchases with the intention of returning some items. “Online purchasing behavior is becoming the norm, and customers understand that since they cannot touch and feel the product, there is a high probability that items will be returned. Today’s consumers are accustomed to returning the things they do not want,” said Sobie. Many shoppers buy multiple items in different sizes or colors, knowing they will return some of those products. This practice, called bracketing, is a significant concern for retailers and has driven up return costs for the seller.

“The cost for shipping an item back to a retailer continues to go up with rising freight and labor costs,” said Erin Halka, senior director of solution strategy for Blue Yonder. Retailers have started charging for returns to offset the costs. “Charging for returns can deter customers from over-buying sizes since at least 10% of returned goods cannot be resold or need to be repaired.” Halka discussed how retailers find it challenging to keep enough products in stock when customers buy multiple items. “Some retailers I worked with over-buy up to 20% to compensate for returns,” stated Halka. Returning product to physical stores is usually the best option to avoid return fees.

Returns continue to grow amidst economic pressures

Returns were 16.6% of total retail sales in 2021, with online returns at almost 21%, according to the National Retail Federation (NRF) and Appriss Retail. Economic pressures are driving up returns as nearly 1 in 4 survey respondents have been returning a more significant percentage of their online purchases due to inflation and other economic forces impacting their financial health. This number is almost three times higher for those aged under 45. “Despite these challenges, the growing preference for in-person, box-free returns is a huge opportunity to deliver customers the seamless return experience they’re looking for while significantly driving down costs by up to 40%,” said Sobie. Happy Returns, a PayPal company, conducted the Returns Happen 2022 consumer insights survey.