A recent survey by leading monthly installment payment solution Splitit highlights the growing importance of consumer returns within the ecommerce industry. The Splitit survey revealed that a good return policy is not only key to overall customer experience, but directly affects web conversion and, ultimately, a retailer's bottom line.
Online return rates are expected to dramatically increase as the holiday season marches on and gifts are returned or exchanged. In 2018, roughly $400 billion worth of returns were made throughout the year in the U.S., with 25 percent of those returns made at Christmas time. American consumers were expected to return over one million packages to e-commerce retailers every day in December 2019. This trend is estimated to peak on January 2nd with roughly 1.9 million returns projected on what UPS has dubbed "National Returns Day."
The Splitit survey revealed that nearly 60 percent of consumers have returned an online purchase, with 38 percent having returned up to 10 percent of all online purchases they have made. Twelve percent of respondents returned a purchase within the past month, 11 percent within the last six months, and 18 percent did so within the last year. Splitit also discovered that 48 percent of respondents have purchased multiple variations of an item with the intention of returning one or more items, the process known as "bracketing."
Impact on web conversion
More importantly for merchants, the survey demonstrates that a retailer's return policy weighs heavily on web conversion, with returns top of mind for consumers when deciding whether to make a purchase. The survey found that a staggering 52 percent of consumers have abandoned an online purchase out of fear of a difficult return process. This number increases to 67 percent for millennial respondents (ages 25-34), highlighting the heightened importance of a smooth return process for those who grew up accustomed to online shopping. And with 10 percent of consumers dissatisfied in some way with their last return experience, the survey results serve as a warning to retailers that returns are high stakes – with customer experience and overall sales at risk.
"Whether it's a fear of buyer's remorse or uncertainty about fit, our research shows that, today, returns are a top consideration for consumers even before their purchase is completed," said Brad Paterson, CEO of Splitit. "More than ever, we are seeing the importance of an easy return process to give consumers peace of mind and increase revenue, as returns are determining purchases long before a customer reaches checkout."
Top qualities consumers look for in a return policy:
- 20 percent of respondents said a return shipping fee would make them less likely to purchase from a given retailer.
- 39 percent of respondents ranked "free shipping" as the overall most important feature of a good return policy.
- 30 percent of respondents ranked "no questions asked" as the most important feature of a good return policy.
The survey, conducted in November 2019, was jointly carried out with Google Consumer Surveys based on a representative sample of more than 500 respondents from the United States, aged 18-65+.
