By Contributing Author
As we make our way through the pandemic, online shopping, which was already popular, has become a way of life. People who were once reluctant to pay bills online now routinely order takeout, groceries, presents, and clothing, all from their computer or phone. One of the biggest attractions of online shopping (besides shopping in your pajamas and avoiding Covid-19) is the ability to easily return unwanted items.
Not only products, but also events are seeing an increase in “returns.” Covid-19 has made both consumers and event producers leery of making unbreakable plans. Everything from weddings to large trade shows were cancelled due to the pandemic. This left many people wondering about the legality of their cancellation policies. Going forward, more people on both sides of the contract are likely to demand “Force Majeure” clauses in their contracts, and want refundable down payments.
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But will companies be able to continue to afford returns and cancellations?
How Popular Are Returns?
According to one study, 30% of all products ordered online are returned, compared to 8.89% purchased in brick-and-mortar stores. Obviously, some online returns are driven by the inability to try on clothing or see an item clearly. Creating better online sizing guides and images will help reduce these returns. However, many online shoppers admit to buying multiple items, planning to return the ones they don’t want. Over 90% of surveyed consumers said an easy product return process is important and 79% of consumers want free shipping on returns.
Grocery delivery services and some larger online retailers are becoming famous for letting customers “return” items and giving credit without demanding the item back. In the case of groceries, returned items can’t be re-sold. This means that having the item returned would result in an expensive waste problem. Even some big retailers are worried about not being able to re-sell non-consumable items. Although it may be legal to do so, timing or condition of the item may make a re-sell difficult. By not demanding the item back, stores instead strengthen the consumers’ positive impression and save themselves the hassle and bad publicity of destroying what should be usable products.
Returns Going Forward
Even before the Pandemic, businesses were beginning to worry about the impact returns had on their bottom line. A 2018 study suggested that one way to combat the return problem was to encourage in-store returns. This solution works for both parties, as customers appreciate the convenience of returning items in store. Stores prefer in-store returns since bringing someone in the store increases the chances that they’ll purchase an additional product. Obviously, this practice has been less popular with Covid-19, as people try to avoid entering stores.
However, due to the pandemic, many small stores are developing the same sort of online presence as their larger counterparts. Independent bookstores, boutiques and grocery stores all now offer online shopping in addition to an in-store experience. When people can once again go into stores, this may put smaller businesses on more equal footing.
It seems clear that now that consumers are used to shopping and returning products online, stores will be reluctant to change their return policies. But also clear is that post-pandemic stores cannot afford to ignore the costs of returns. A variety of new businesses are popping up to solve the problem. Some firms offer logistical solutions for companies without an online presence or allow companies to liquidate their unsellable returns. Of course, companies can also sell open boxed products at a discount either in store, in “outlet” versions of their store, or on sites like e-bay. In the charitable world, there are already several companies that redistribute products from consumers to nonprofits. It’s possible that retailers could begin to make better use of these businesses themselves.
If you own an online or brick and mortar store, returns are going to continue to impact your bottom line. If you’re just a fan of online shopping and returning, continue to read the policies carefully and make your decisions wisely.