Retailers can turn returns into a competitive advantage

New research indicates returns are ubiquitous, but how retailers manage them can have a major impact on their business.

According to the 2022 “State of Returns” report and “2022 Returns Benchmark Report” from post-purchase experience platform Narvar, in 2021, the value of merchandise returned to retailers hit $761 billion, up 78% from 2020.

Other key insights from Narvar's research include:

• One-quarter (26% )of shoppers surveyed said they had returned more than four items in the last six months, with apparel and footwear accounting for 46% of recent returns.
• Thirty-seven percent of shoppers surveyed returned their most recent online purchase by dropping it off at a third-party location. Third-party drop-off adoption has grown steadily for four years now, from 11% in 2019 to 19% in 2022, which Narvar says reflects shopper demand for a wider range of convenient return methods.
• More than six in 10 (63%) consumer respondents said they asked for a refund when making their most recent return with a non-Amazon retailer.
• When asked to identify what makes a VIP/loyalty program great, consumer respondents cited instant refunds (77%) and home pickup (76%) as the top benefits.
• For the sixth year in a row, "fit and size" was consumer survey respondents' top reason for returns (45%), among both first-time shoppers (22%) and loyalists (78%).
• Sixty-three percent of shoppers surveyed admitted to bracketing (intentionally purchasing multiple variations of the same item with intent of only keeping one), up from 55% in 2019. A growing number of surveyed shoppers (15%) say bracketing is "just how they shop now."

"Our research shows that shoppers are undoubtedly benefiting from retailers' generous return policies," said Amit Sharma, CEO of Narvar. "Return windows are getting longer, refunds are happening faster, and technology is making returns easier than ever before—boosting customer satisfaction. There is a significant opportunity here for retailers to increase loyalty and retain revenue by offering differentiated and personalized return policies that meet different customers' needs."

Survey: Returns impact online customer retention
According to “Consumer Report: How Returns Impact Customer Retention,” a recent survey of more than 1,000 U.S. online shoppers from Shopify returns platform Loop, customers pay close attention to a brand’s return policies. Close to six in 10 (57%) surveyed shoppers are willing to abandon a brand entirely when provided a poor post-purchase experience.

And close to nine in 10 (87%) respondents to the Loop survey indicated that post-purchase incentives influence their likelihood of making a first-time purchase with a retailer. More than half (52%) value product discounts, while 41% value coupons for future purchases or in-store credit, and 34% value an unlimited returns window.

For the 2022 “State of Returns” report, Narvar conducted an online survey in July 2022 of 2,023 consumers ages 18–65 who had returned at least one online purchase in the last six months. For the “2022 Returns Benchmark Report,” Narvar analyzed the published return policies of 200 retailers in August 2022 to create a baseline.