Study: Holiday returns performance misses mark

Retailers may find themselves banished to the Island of the Misfit Toys if they do not improve their handling of returned holiday purchases.



According to new data from Kurt Salmon, it took an average of 13.3 days for retailers to credit returns to accounts during the 2015 holiday season. This marked an improvement from the prior year’s 16.8 days, but still far from customers’ expectation of about seven days.



Despite this expectation, fewer than 20% of retailers credited their return in seven days or less. Specifically, 18% of returns were credited in week one, 43% of returns were credited in week two, 27% of returns were credited in week three and 12% of returns were credited in week four and beyond.



However, retailers did try to make the holiday returns process as convenient as possible. Almost two-thirds (64%) of retailers eased returns by offering a return label, while another 47% of retailers provided for free returns when shipping to the retailer.



Only 30% provided both a return label and free return shipping, though 92% of retailers with physical stores allowed buyers to return online purchases to the store, which is typically free. For those that charged for returns, the average charge was $11.50.



Measuring top performers, the best-performing retailers on return credits included American Eagle, Amazon, Cole Haan, Lowe’s, Coach, Best Buy, Gap and Old Navy. These retailers provided customers with a fast-track path to get the product back to the retailer and credit the customer in a timely manner.



As with most things involving retail, customers looking for a quick returns process got what they paid for. The average return time for free returns was 14.7 days, while the average return time for a return that cost less than $10 (excluding free) was 12.4 days. The average return time for returns costing more than $10 returns (excluding free) was 10.8 days.



Omnichannel fulfillment added complexity to returns this holiday season. About 10% of retailers charged a ‘”per box” fee for returns. For retailers that ship in multiple packages (58%), this charge can lead to higher returns costs for customers.



Kurt Salmon also found that many retailers’ return policies were difficult to interpret. For example, some retailers allowed in-store returns only for in-store products, but failed to identify whether a purchase was available online only.