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Returns rates expected to surge upward

December 23, 2013

The United Parcel Service has recently suggested that e-commerce companies can expect a stark increased in the amount of products returned by their customers in the coming month.

The United Parcel Service has recently suggested that e-commerce companies can expect a stark increased in the amount of products returned by their customers in the coming month. 

UPS projects that returns will increase by 15 percent this holiday season, marking a growing cost for retailers. Returns may be increasing due to lenient exchange policies offered by many major retailers.

ComScore, for example, reported that roughly 65 percent of all consumers are more likely to shop at a given e-commerce company if they offer a hassle-free return policy. The firm also reported that roughly half of all consumers had returned a product they had previously purchased at an online payment processing page.

“We’re getting to the point now where a retailer that doesn’t have a seamless return policy is viewed as being from another era,” Kit Yarrow, a consumer psychologist, told StellaService. “They’re less trustworthy in the eye of the consumer. There’s too much competition otherwise, and I don’t see someone hanging on long without a consumer-centric return policy.”

So while returns can come at great cost to many e-commerce retail outlets, many consumers are likely to spurn store locations that do not offer them lenient exchange policies. The Wall Street Journal reported that, as a result, some retailers have even begun to take proactive measures to better prevent consumers from abusing their returns policy. OVC, for example, emailed the buyers of a often-returned product a how-to video detailing how to best use the device. The item’s return rate then dropped by 30 percent, saving the retailer an returns on $55,000 in products.

Another company, Modnique.com, has begun to give gift cards to customers in place of exchanged products, according to the news outlet. 

“Sometimes returning the product will actually cost us more,” Einaras von Gravrock, CEO, told the news outlet. “This allows us to turn a challenge into an additional sale.”

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