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Thu Apr 25 2019 14:57:06

Returns Are the Hottest Thing in Ecommerce

By: Ina Steiner

Companies are falling all over themselves to make it easier for buyers to return things - PayPal, Amazon, and Kohl's among them. But there's a cold hard fact behind such initiatives: they help retailers gain information that can help them control returns abuse. Unfortunately, marketplace sellers don't have the same ability to identify and potentially block serial returners.

This week brought fresh evidence that retailers believe how they handle returns is crucial. PayPal is investing in Happy Returns, leading a strategic funding round of $11million ("the same company that took the friction out of payments wants to take the friction out of retail returns," Happy Returns told us). And Amazon will soon allow customers to return purchases to all of Kohl's 1,150+ stores.

PayPal may gain additional insight into returns behavior with its investment in Happy Returns - it will be interesting to see how it can leverage that data. (Update: Dan Davis connected the dots, responding to our tweet: "PayPal announces investment in returns service provider a couple weeks after announcing a change to their UA whereby PayPal will keep fees on returns and refunds." See "PayPal Just Made Returns and Refunds More Expensive.")

Unfortunately, third-party sellers on marketplaces such as Amazon and eBay have very little control over returns and little ability to spot returns abusers. And while the marketplaces themselves can spot serial returners, it isn't necessarily in their best interest to take action, since the seller bears the cost, not the marketplace.

Meanwhile, according to Bstock Solutions, many retailers are re-examining their returns policies due to serial returners. It cites some interesting research including the following:

Returns from online fashion purchases will have an impact of £6.6 billion for UK retailers
US loss from annual merchandise return fraud is estimated at $17.6 billion
55% of UK fashion and clothing brands would consider ‘banning serial returners’
Millennials (aged 25-34) are the worst culprits for wardrobing with 21% confessing to buying with the intention of sending back, closely followed by Generation Z (aged 18-24) at 19%
Of those who have admitted to wardrobing, 55.6% of men had done so more than once in the last 18 months, compared to just 31.3% of women
69.5% of the 200 retailers surveyed believed that wardrobing was common
Bstock said further study on fraudulent returns indicates that the worst serial returners might also be a retailer's best customer. But while a shopper who returns an item to a marketplace seller may purchase another item on the platform, it might not be from the same seller, which is another reason sites like eBay may be loathe to punish serial returners.

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Readers Comments

Returns Are the Hottest Thing in Ecommerce

by: Barbbie

Mon Apr 29 09:53:42 2019

Amazon lets you charge a restock fee. Amazon also will cover the issue or allow you to change their defective claim to buyers remorse through the saf T claim process. Although it is annoying to have to go through it, it does work.

On ebay this last 12 months, I have had more return requests than the previous 20 years. Every time I get a liar I call ebay to complain and get it closed. I think that is all you can do at this point. I find this far more irritating than the Amazon process. I do not appreciate losing my restock fee.

Anybody want to buy an ebay store? LOL!

Returns Are the Hottest Thing in Ecommerce

by: LasVagueness

Mon Apr 29 10:45:17 2019

Bravo, @rover!

Returns Are the Hottest Thing in Ecommerce

by: purpleiris

Mon May 6 19:40:29 2019

In the 10 years I've been selling online, I have been fortunate to NEVER having had a return. I think that has a lot to do with my return policy as well as how well I describe and photograph my items.

I have never accepted general returns without deducting the cost of shipping from the refund -- even on "free" shipping orders. Now that PayPal won't be refunding fees on refunds, that will be deducted as well. Of course, I do accept returns for lost shipments and damaged/inoperative items, providing a full refund to the customer.

I take great care in providing clear, close-up images of my items, Photoshopping each and every one to crop out dead space and ensuring the colors display well. I also make sure to provide every little detail in descriptions that would be of importance to a shopper. Hence, the reason I very rarely get questions. The last time I got a question was at least two years ago and it was due to the fact that I forgot to include the dimensions of the product.

I know there are some who feel a full refund should always be given, no matter what. That's not a very wise business practice, though, unless you're a big corporation that can afford to eat it. Even they are looking to thwart serial returners.

It's about more than money, though. It's mostly about what kind of message you're sending to shoppers. If they see they can return something for a full refund in any case, then you're inviting serial returners to take advantage.

Shoppers need to learn that they cannot expect to return something they bought online from a small business for any old reason without it costing money that the business really cannot afford to eat. If you're allowing it, then you're needlessly hurting your own business.

There's a big difference between how a small business conducts business and how a large corporation conducts business. A small business will never grow if they're allowing customers to take advantage. We just have to accept that we're not in a position to provide the same privileges as larger competitors.

That just means that we have to find other ways to draw shoppers in -- quality customer service, a personal touch, pricing, "free" shipping, etc. Yes, we have to work harder to compete, but that's just the nature of small business.

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