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Thu Apr 25 2019 14:57:06

Returns Are the Hottest Thing in Ecommerce

By: Ina Steiner

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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.



Comments (23) | Permalink

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by: mcposty This user has validated their user name.

Thu Apr 25 15:54:49 2019

Easy, dont use mediums like ebay and amazon who empower thieves and "renters".

Also, make sure to write congress abiout not allowing mastercard and paypal to steal your money just because they feel like it and give it back to the buyer.

Time to fight back

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

by: hopeforthebest This user has validated their user name.

Thu Apr 25 17:20:34 2019

Yeah, write Congress: you can be certain your one tiny lonely little voice will outweigh Amazon's hundreds of millions of dollars of campaign contributions.

Even if a million of us write, all of our donations together amount to less than 1% of Ebay's and VISA's contributions, so guess who's going to get listened to?

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This user has validated their user name. by: toolguy

Fri Apr 26 11:08:45 2019

19 years on eBay

I've bought maybe 400 items in those years

I returned 1 for being SNAD (item was incomplete, missing parts)

I just don't see returns as a problem as a seller or buyer

But that's just my eBay experience and yours might be completely different then mine is. . . .

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This user has validated their user name. by: The End

Fri Apr 26 19:04:30 2019

I don't accept returns.
Nobody can make me.

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by: nuggets This user has validated their user name.

Fri Apr 26 20:44:45 2019

We never had many returns until June 2018 after more than 10 years. end of 2018 and so far in 2019, its ridiculous and now with paypal keeping 3% and use paying the original shipping, its becoming more and more frustrating. Customers have been trained to be bad customers, its typical now. The only thing we can do is block them.

Ebay in the last couple years killed our 20% discount, returns have quandrupled where they were not consistently for years, we are "forced" into free shipping (to be seen is not really a choice), and now paypal keeps 3% when some wishy washy customer isnt reading. It happened today. A purchase, 3 minutes later, cancellation request. No explanation. While not a huge amount of money, its more and more. We have 3-4 returns open almost consistently, almost none to do with us sending about a bad product. A lot of just didnt like it on our dime.

While this easy returns may be helping the trashy companies only interested in selling tons, it hurts the good businesses who had it figured out and kept frustration down.

These companies are terrible and im sure there will be a come around.

Were losing over 10k a year yet proving better service, still being 100%, and taking a lot more abuse.

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

by: maxmad This user has validated their user name.

Fri Apr 26 21:14:20 2019

I honestly don't understand why anyone would return an item ? when you can get it for free,

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This user has validated their user name. by: toolguy

Sat Apr 27 08:56:09 2019

@nuggets

"and now paypal keeps 3% when some wishy washy customer isnt reading. It happened today."

Paypal DOESN'T start keeping the 3% until May 1st

I refunded someone yesterday over payment of shippiing, Paypal refunded the 3%

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

by: Chicago48 This user has validated their user name.

Sat Apr 27 14:01:56 2019

Merc and Posh have a short window for when the customer can complain and return an order.  This is how it should be.

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by: maxmad This user has validated their user name.

Sat Apr 27 14:39:56 2019

@toolguy
"""Paypal DOESN'T start keeping the 3% until May 1st""

toolguy ha ha ha you should have been a comedian,,,,it would have made you way money then ebay

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

by: Snapped This user has validated their user name.

Sat Apr 27 22:13:38 2019

Because eBay does not acquire their income based on gross sale revenue, rather by fees and comissions paid, they have no reason to account for or deduct the 'value' of returns or cancellations from item sales metrics.  They certainly do, however, have an interest on accumulating growth on their GMV, to both appear 'vibrant' by an ability to show ''sold'' items, and to appear to 'grow' in order to snag investors.

Given this, and that they do not 'suffer' loss from returns or cancellations, what is to stop them from making direct purchases (by proxy(ies) of course), and then essentially either not paying, or cancelling outright?  Wouldn't that do wonders for both their ability to show 'sales' as well as an increasing GMV?  

They don't show 'watchers' anymore, so who can say if the listing was even visible?  And the sponsoring advertisers could even get all their warm fuzzies believing there were actual potential customer eyeballs on their ads, right?

Of course, this is all pure speculation - even if nobody here or elsewhere knows specifically of any serial returners/cancellers who have been sanctioned.  Privacy concerns don'tcha know.  And if they do, well, certainly not all of the cancellations and returns, no matter how unwarranted, would be disgenuous, and some would naturally have to 'suffer' - for appearance sake.

Yeah, but eBay would have to exhibit some kind of immoral chutzpa to pull something like that - even occasionally - just to appear more robust and eCom relevant than they might appear without such...manipulation.  Even if none would be the wiser.  Even if it doesn't matter a bit - to them.

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

by: Whatever This user has validated their user name.

Sun Apr 28 00:31:20 2019

interesting - I've had a website (selling) for over 20 years - I can not remember ever having a return on my own venue. In march I had 6 on ebay. They do it because they know they can - simple

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by: pace306 This user has validated their user name.

Sun Apr 28 09:02:01 2019

Snapped's comments are brilliantly technical and spot on ... mine - not so much.

Returns are a cheap (free), easy way to get customers to come back- because they cost the venue NOTHING to implement.

eBay threw some cr@p in the TOS and gave themselves the rights to demand you do things in an online transaction that you would never do IRL.

Of course eBay is the lowest form of life, needlessly inserting itself in every possible facet of the transaction - and at least they arent shy about it - the head weasels in charge tell everyone so in every speech they make.

Amazon just keeps raising the bar on returns - and tells anyone that wants to be a 3P seller - match it or dont sell here. Well, if you want traffic (yes I know John Barleycorn Must Die)(google it) since eBay provides little to none - you have no choice. You hope & pray to "make it up in volume" and eat the returns cause some business is better then NO business (eBay).

It wont get better either. Amazon can set any bar it wants and 3P sellers will do it "or else", and eBay throws Hampton Beach parties each time USPS raises its rates making returns ore expensive - since they make money on returns.

The sacred cow that some here "forgive eBay for" was slain long ago - eBay making money on FVF, on labels and allowing itself to be involved in returns to start with. Its part of the "original sin" that JD and other CEOs of eBay past & present thats allowed to go on.

Bottom line - if the platforms themselves had to pay out of pocket for returns there would be very few, when its on a sellers dime its "roll up, roll up - get your returns here!"

B@st@rds.

Perminate Link for Returns Are the Hottest Thing in Ecommerce   Returns Are the Hottest Thing in Ecommerce

This user has validated their user name. by: toolguy

Sun Apr 28 12:37:19 2019

@pace306

"since they make money on returns."

S/B

since they make money on SOME returns.

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by: Snapped This user has validated their user name.

Sun Apr 28 16:19:11 2019

"since they make money on SOME returns."

Oh fer.... How many of THOSE should be 'acceptable' then?  

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by: Bubbles This user has validated their user name.

Mon Apr 29 01:29:56 2019

'Given this, and that they do not 'suffer' loss from returns or cancellations, what is to stop them from making direct purchases (by proxy(ies) of course), and then essentially either not paying, or cancelling outright?  Wouldn't that do wonders for both their ability to show 'sales' as well as an increasing GMV? '     Have suspected this for a long time.  

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by: TDAKS This user has validated their user name.
Web Site

Mon Apr 29 02:44:06 2019

So if PayPal and eBay can't lose then why bother checking a buyer's return pattern, especially PayPal in coming days when it simply can't lose a cent.

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by: Eagle This user has validated their user name.

Mon Apr 29 04:34:11 2019

I've noticed the customers aren't so quick to return items when they only get the initial cost of items and are out of pocket on both the initial shipping and the return shipping. Yet with all the payment processors keeping the transaction fees and taking it from the vendors while refunding the cost of items to customer, the vendors still lose on a return. Another example of big biz taking advantage of the small guys.

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by: rover This user has validated their user name.

Mon Apr 29 05:23:53 2019

I once had a ''customer'' buy a fancy dress item and then seek to return it after 10 days under our draconian UK returns laws as it ''did not match'' her outfit for the special event. Except that the stupid b***h had forgotten that pictures of her wearing it at said event were all over her Facebook page. She got a very scary message  from our ''legal'' department asserting that we were partnering with our city police department ''retail crime unit'' on a new initiative for returns fraud and threatened to report it to them for investigation if she proceeded with her returns request. Judicious use of words like ''serious criminal offence'' and ''heavy penalties'' plus the risk of going on the national fraud register (making it impossible to get finance and mortgages) no doubt had the appropriate effect because we heard no more of the return request.

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by: Eagle This user has validated their user name.

Mon Apr 29 06:03:55 2019

Rover; Will have to remember that! I had customer early on in the business that bought my most expensive necklace and mens bracelet and contacted me a week afterwards wanting to return. They even came out and told me that they only "bought" to wear to an engagement over the weekend and didn't have any further use for the jewelry afterwards. Like I said, we only been in business less than a year and hadn't itemized a returns page. We itemized a return page immediately and added in returns that "we hold the option to charge a re-stock fee if we feel warranted to do so." If other customers want to just "rent" for the weekend, they are going to pay something if I even accept it.

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by: hawk This user has validated their user name.

Mon Apr 29 07:16:35 2019

this is where greed and power mongering has destroyed small , honest businesses. instead of forcing sellers into into giving their products away free , paying FEES to do it , and paying more FEES for phony returns , they should build their business on honesty , fair business practices , protection for sellers and buyers equally. stop destroying honesty and free enterprise for all.

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