Returns and refunds at online retailers need improvement

In a study of the returns and refunds performance of the 25 largest online retailers, StellaService found that the majority of retailers evaluated aren’t meeting consumer expectations.



StellaService analysts ordered the same product from each retailer to be delivered to the three separate regions of East, West and Midwest. They then returned the product, tracking metrics such as the presence of a prepaid, adhesive return label, total time to receive a return authorization and refund speed. The average refund speed of was 10.7 days.



In a survey on consumer expectations during the holidays, StellaService found that 69% of consumers expect to receive a refund in less than 10 days. Only 36% of the top 25 met those expectations for returns requested by StellaService analysts during the study period.



The two fastest refund speeds came from the same companies who topped a similar study in November 2012, Shopping.HP.com and Amazon.com, respectively. Shopping.HP.com was fastest with an average of about two days, followed by Amazon.com at four days. The average refund speed of the bottom five performers was more than 17 days. That’s about four days slower than the bottom five performers from the November 2012 study.



The five fastest retailers, who all processed refunds in less than seven days, were: Shopping.HP.com, Amazon.com, Costco.com, Store.Apple.com and Macys.com.



StellaService analysis found the key to Shopping.HP.com’s swift refund process is that once the returns were scanned by the carrier, the retailer initiated the refund immediately. What slowed most retailers was a long processing time once the product hit the warehouse. In one case, an order sat in the warehouse for 15 days before a refund was issued.



Only three retailers included prepaid labels in all packages: HSN.com, Nordstrom.com and VictoriasSecret.com. Also of interest, Store.Apple.com was the only retailer to use express shipping for returns.