This year, the National Retail Foundation is projecting holiday sales to be around $586 billion, with online sales increasing approximately 12 percent over what they were in 2011.
Clearly, many of us are comfortable with shopping online because of wide merchandise selections, the ease of shopping from our living rooms, and the overall relief of having goods shipped by the retailer, instead of having to stand in line at USPS, FedEx, and UPS counters.
But, inevitably, with every holiday shopping season comes an aftermath of returns, brought on by wrong sizes, damaged goods, or any number of other reasons. Most of us who have been in the return phase of the cyberworld recognize this as part of the post-holiday blues, since cyber-returns can be laborious, frustrating, and in some cases, almost impossible.
Why does this happen?
For starters, no store likes to see returns, whether it's cyber or brick and mortar. Taking items back is expensive. Returns cut into sales margins, require staff and systems time to process, and leave merchandisers with excess goods that ultimately find their way to clearance bins. Consequently, there is a kind of returns denial that operates. Merchandisers put little effort into this process, and as a result, it's much more difficult for customers to return goods than to buy them.
The returns process gets compounded in the cyberworld, where there isn’t the face-to-face accountability that merchandisers have when they must confront their customers in a brick-and mortar experience. Cyber-returns can be a convoluted process where you go from chat rep to chat rep -- or worse yet, send emails to a general contact email address that are never answered.
In many cases, you also incur costs and restocking fees when returning items bought online.
Retailers know that returns are a problem. They also recognize that it's equally challenging to ensure that enough products are on hand when customers want them. They have been struggling with sales and returns to get these processes right, and have been reshaping their supply chains to where warehouses and distribution centers play more active “storefront” roles -- actually direct-shipping goods to customers instead of shipping merchandise to retail outlets first.
Unfortunately, the process of reverse logistics -- where goods that customers want to return for refunds must be accepted back to the warehouse and then credited to customers -- is not nearly as far along. “We’re doing great in optimizing our warehouse operations so we're responsive to sales,” a warehouse manager for a major retailer told me, “But when it comes to returns, the boxes just sit on the warehouse floor, and we get to them as time allows.”
The bottom line: The item returns process brings lots of pain for retailers and their customers.
So, if you're cyber-shopping, what can you do to hedge your bets so as not to end up in the returns lane?
Buy an item less likely to be returned. Coffees, teas, books, and movies are less likely to come up as returns than sweaters that could be the wrong size, or perfumes whose scents recipients don’t like.
Check into the retailer’s return policy before you purchase. You might want to reconsider buying if you read that “all sales are final,” if there are significant restocking fees, or if you see that their “how to contact” list is limited.
Consider online retailers that have a physical presence in your geographical area for returns. You can still stand in line at a brick and mortar retail outlet.
Finally, if you're an online retailer with a cumbersome returns process, you might ask yourself if it's time to reconsider. Forrester found that 81 percent of the consumers it interviewed said that if an online retailer made the returns process easier, they would be likely to buy again from that retailer, with 81 percent also saying they would be more loyal to retailers with a generous returns process. These are important statistics, especially for online clothing merchandisers, which can see returns as high as 20 to 30 percent.
– Mary E. Shacklett, President, Transworld Data
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