- But first, some (reassuring) background: Apparently 48% of shoppers say that their top reason for choosing a retailer is a flexible returns policy. But, as is true in many instances, perception is everything! That is, according to a 2016 Holiday Shopping Trends survey from the National Retail Federation, “On average, two-thirds of consumers say that they didn’t return any of their gifts.”
So, how important is it to have - and brag about - a “free and easy” return policy?
- A Washington & Lee University study compared two similar online retailers; one offered free shipping on returns, and the other required the customer to pay shipping costs to return items.
- What happened? Over a two-year period, average spending per customer was four times greater ($2,500 versus $620) for the retailer offering “free and easy” returns!
Wow! That's impressive, isn't it?
Lessons for ALL RetailersThe lessons from this apply to brick-and-mortar retailers as well. What about your store's return policy? Does it seem “free and easy”, or is it restrictive?
- If you require that items must be returned within a very short window of time, or can only be returned for “store credit”, you may be protecting yourself from being “ripped off”.
- But you also may be assuring yourself of missing out on future sales.
- Bigger yet, customers that trust you as a retailer are very likely to shop with you more frequently, and tell others.
Are there costs? Of course. Some customers will abuse it. Some merchandise will not be able to be returned to your shelves. For that, consider Ebay or Amazon for liquidating it yourself, or use some of the so-called “return services” to recoup costs.
But consider the cost/benefit comparison. What does a “free and easy” return policy really do?
It builds confidence and trust with your customer. It keeps them coming back, and spending more! ($2,500 vs $620, remember?)
Hmm. Maybe it’s time to quit focusing on returned merchandise. Concentrate instead on those “returning customers”!
And do whatever it takes to have many happy customer returns!