Returns Policies

by Nigel Fenwick

Return policies can make the difference between a satisfied shopper and a frustrated ex-customer.

In our recent mini-eRetail Scorecard report (2000-11), we analyzed the return policies on the websites of traditional retailers and Internet only retailers.

In particular, we looked at four key criteria:

1. Can the shopper return merchandise to a local store?

2. The cost to the shopper to return merchandise

3. Can merchandise be returned without authorization?

4. The clarity of the returns policy and the simplicity of the returns process

Why The Returns Process Makes A Difference

Returning merchandise is possibly the most annoying facet of the online shopping experience, especially when it's the result of a damaged shipment or an error by the eRetailer.

If I make a mistake and order the wrong thing, then I accept some responsibility and suffer through the often painful return process without much complaint. Although, the more difficult this process is, the less inclined I am to shop at that particular store again.

What really gets me annoyed is when an eRetailer makes a mistake in shipping, or when the merchandise arrives damaged, and I have to put myself out to ship the product back to the company. By "put myself out" I mean anything that requires me to leave my house (or office, or wherever it is I typically order products online). 

If I can order something and have it delivered without needing to leave my home there is no reason why I shouldn't be able to return it the same way, i.e. without leaving home.

Some companies recognize this fact, carefully including in each shipment return labels that allow the package to be collected from the home by the carrier, such as UPS. All that is required to ship the merchandise back is a quick phone call or online transaction to arrange for pickup and have the correct merchandise delivered.

Pre-paid return labels that use the postal service are also good, unless the package is too big to fit in a mailbox. In this case, a trip to the post office is a considerable annoyance.

Then there are the eRetailers that suggest I should take my merchandise to the Post Office, UPS or another carrier, and pay to ship the merchandise back, making sure I request some form of tracking number and proof of delivery. Not only have I been inconvenienced, but now my total cost for this transaction has gone up considerably. Of course most eRetailers do say they will refund return shipping if the return is a result of their error, but how do they know how much I paid? And what happens if I received this item as a gift from someone else? All of this casts a pall of uncertainty over the whole process and makes many shoppers feel uneasy about shopping online, especially after they have had to return something!

From my perspective, being able to return something to a local store is not particularly useful in that it requires me to leave the house. On the other hand, it has the big advantage that I know I have received a credit for the return, something that always lingers in the back of the mind when returning merchandise through a third party carrier.

If a shopper is buying gifts to send to someone else, having a local store where the recipient can return or exchange their new gift is especially useful. That way the recipient doesn't even need to notify the gift giver they are exchanging the merchandise.

Not every online shopping transaction results in a return. Because of this, a shopper may happily make several purchases before discovering the inadequacies of a particular return process. From the eRetailer's perspective, it may be difficult to identify returns as a cause for losing repeat customers. One way to do this is to analyze the fall-off in repeat purchases for shoppers who have made returns vs. those who have not.

For many shoppers, returning a product is simply an extension of the shopping experience. If the returns process is difficult, the shopper assimilates that information to complete their perception of the entire online experience. eRetailers that economize on returns are in danger of alienating their customers.

Click here to buy the 2000-11 Report

Do you have an opinion you would like to share? Click here.