Study: Online shopping generates more returns

Purchases made online are returned at a higher rate, but there is a silver lining for some retailers.

According to a study from enterprise analytics platform 1010data, year to date through November 2019, Amazon saw a 6% return rate on net spend, while Walmart experienced only 2%. Examining the e-commerce return rate from The Gap, 1010data found online sales from 2015-2018 were returned at a rate four times higher than in-store sales. 

During that same period, the company’s return rate grew from 14% to 17% of total sales, driven by the fact Gap’s online sales have a return rate of 31%, or almost four times higher than in-store sales. 

However, omnichannel retailers that offer in-store returns of online purchases (this can include brick-and-mortar retailers who partner with e-commerce retailers) can gain an advantage. 1010data indicates that while post-holiday shoppers visiting a store are return customers, but many are visiting a store for the first time or after a long absence. 

For example, during the week following Christmas 2018, department stores and big-box retailers saw roughly one-third of their in-store traffic come from people who had not visited the store during the holiday shopping season. Those new visitors paid off – Target and Kohl’s saw half of them return over the next six months. 

To arrive at these findings, 1010data used transaction data derived from the dollar value of credit and debit card transactions; these findings were not adjusted for cash transactions or store credit spend.