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Returns are as much a part of the overall customer experience as purchases. Retailers are looking to get the process right this holiday season, when returns are expected to swell as unwanted gifts make their way back to stores.
Returns typically increase around the holidays, with 13% of online orders returned in November and December in 2022, according to data from Salesforce. And that number is expected to grow, according to analysis from Optoro, which expects shoppers in the U.S. to return $173 billion worth of holiday purchases, up 28% year over year.
With that growth in returns, it’s all the more important that retailers make the process painless as possible.
A good returns experience is simple and eases any misgivings the customer may have about making that return, according to Steve Rop, COO of return services firm GoTRG. Retailers should aim to welcome returns to grow loyalty, he said, not frustrate customers to the point they avoid interacting with their brand.
“Don’t make them feel guilty for returning it, and all along the way make it frictionless and build your brand,” Rop said in an interview with sister publication CX Dive. “Those are the best words I could say to any retailer just trying to make a customer happy.”
Studies have shown that customers will pay more for products with flexible returns policies. But with the institution of flexible policies, retailers need to prepare for higher returns volumes that come with them, according to Mehmet Altug, director of George Mason University Costello College of Business’ Center for Retail Transformation.
Altug agrees that brands’ return policies should avoid causing frustration. A bad returns experience can harm a brand’s reputation, and restrictive policies can make gift buyers think twice about making a purchase at all.
“Yes, you will struggle less with returns after the holidays, that’s for sure,” Altug said in an interview with CX Dive. “But then your upfront sales will go down, I think.”
The process of buying a product online and returning in-store — also known as BORIS — is a promising opportunity for retailers who want to show off their great in-store experience.
More than 2 in 5 of retailers have observed an increase in BORIS traffic, and about half said they are strategizing to encourage such behavior during the holidays, according to GoTRG’s 2023 Holiday Returns report.
Getting customers into the store presents an opportunity for brands to wow them with their customer service, even if it slows down the return process, Rop said.
“When you go into the store, you’re met with somebody that really knows their stuff,” he said. “For example, you’re returning a pillow because it didn’t match. Now that person can start talking about different fabrics and different color coordinations. Maybe you can actually avoid that return altogether.”
This approach can still provide consumers convenience as well, according to Rop. Examples include letting customers pick up online orders during the same trip or equipping curbside services to handle the returns process from the customer’s car.
Allowing customers to make returns at a post office or waiving the need for a receipt are other ways to make returns more convenient, according to Altug.
Returns cost retailers money. In addition to the cost of processing items to get them back on shelves, returned items often need to be resold for less than their original price, according to Altug.
However, not every return needs to actually be brought back to the retailer, according to Rop. The so-called “keep it” return approach is particularly viable for those selling less expensive items.
The practice has two CX benefits, according to Rop. The first is that it builds loyalty by letting the customer know the retailer trusts them and doesn’t think they’re scamming for free merchandise.
The second is that not having to make a return is naturally easier for consumers as well as retailers.
“I don’t have to go through the hassle of finding a box and finding a place to drop it off and sending it back,” Rop said.
GoTRG’s survey found that 3 out of 5 retailers have adopted “keep it” policies for certain items, with 27% of companies citing items under $20 as suitable for “keep it” returns.
A simple way to improve the holiday returns experience is to reduce the stress of strict returns windows.
Many gift givers began buying gifts in the fall, and retailers shouldn’t frustrate potential customers by turning them away when they make a return in January, Rop said.
“You have to give consumers leniency; otherwise you’re absolutely pushing consumers away,” he said. “I am not going to [buy a gift] if you only have a 30-day window, because I’m going to sit on it for 30 days, and then I don’t know how soon [the recipient] is going to wait to bring it back.”
Companies also shouldn’t be tempted to tamp down on return windows around the holidays, according to Altug. Keeping policies tight might cut the cost of returns, but it could damage the brand.
“[Customers] are used to certain return policies,” Altug said. “They don’t even read the return policy if it’s from a certain store. So fast forward a few weeks: they come in and they are told, ‘Oops, we changed the returns policy for a few weeks.’ You might upset them, and you might lose them in the long run.”
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