Sears Roebuck built its buisiness on mail-order in a time when the mail was a bit slower thnan it is today. They pushed out their catalogs which had extensive and enticing descriptionf, and they stood by their products. They got even bigger when they shifted their focus to big stores, but that also opened the door to competitors such as K-Mart and then the gigantic Wal-Mart.

Amazon has built a global business by emulating the old Sears Roebuck model. They have great sales pages. They have fast shipping. They have a great returns policy.

They've sweetened the deal by incorporating a network of sellers who provide alternatives to the products actually offered by Amazon. They've also included an extensive rating and review system for both products and sellers.

There are some very real problems with the Marketplace part. Amazon fiercely regulates shipping costs and delivery times, so much so that those who sell on the Amazon platform often lose money on the shipping and have to increase thieir purchase price as a result. The intense competition in conjunction with automated pricing tools has led to drastic reductions in the value of used merchandise, espeically books and records. I tend to think that this is a problem with society's attitudes and the free interchange of information rather than being the fault of Amazon or similar vendors, though.

How can you stop these things ? Its not possible to stop these kind of things since nothing can be pre-planned or timed for an exact date.

@hounhosp Though I've read Tony Hsieh's Delivering Happiness: A Path to Profits, Passion, and Purpose, I don't recall his direct address of that question. I looked it up now and found this from April 2010 http://lsvp.com/2010/04/12/average-zappos-return-rate-35-best-customer-return-rate-50/:

Customers on average return 35% of the items they order from Zappos.com Inc., a web-only retailer of footwear, apparel and other merchandise. But there's a certain group that returns 50% of what they buy.

Zappos loves those customers.

That's because those consumers tend to purchase from among Zappos' most expensive lines of footwear, then happily take advantage of the e-retailer's generous and well-publicized returns policy: Zappos not only will take back any item within 365 days of delivery, but also pays for the return shipping.

And since it costs the same to ship a $300 pair of pumps as it does to ship a $30 pair of sandals, the Zappos policy of winning over shoppers with its returns policy has helped to bring in high profit margins on many of its orders, says Craig Adkins, vice president of services and operations at Zappos, which was acquired last year by Amazon.com Inc.

In the comments section, a Zappos employee elaborates: 

 basically, it comes down to technology, process efficiency, and margins.

We do so much business with UPS, and we're so tightly integrated with their World Hub, that we get their best pricing.

We have one of the most efficient fulfillment centers on Earth. That means that we can ship, process, and re-stock at a very low marginal cost.

And we're efficient because our engineers have developed great technology for automating a lot of those fulfillment related operations.

@Ariella,

That's interesting. I guess that is possible because they don't have that many returns, otherwise I wonder where they will get the money from.

So the question is -- what do smaller organizations, who don't have the flexibility of titans like Amazon, do to handle their returns as painlessly as possible?

Is there a way for these organizations to help customers with their purchases so returns are less likely as well?  Or some way to make handling the returns less costly?

Since I don't think there's too much to be done about the logistics of the actual return, I would think the best approach would be to assist the customers as much as possible in picking out products that will fit the need.

I'm sure that's something to do with it.  Amazon's sales volume is so huge that replacing stuff must be trivial for them.  They want repeat customers.

I must say that I agree with you that there's a difference between companies with physical presence and online-only, but wouldn't conclude thats the reason. 

I would think that is more likely related to the size of the company. Big companies probably have presence in both cases, but regardless of that, they have more revenues in order to build better return processes. Think of Amazon, its online-only but has a decent return policy. 

I espeically like Paypal's approach.

It at least eases the money part of the pain!

@swijeyakumar There are online retailers that make returns a breeze and foot the bill for shipping both ways. They include Zappos and LLBean.

It's great to see some retailers getting it right but it seems to be the ones with physical stores. I find the most issues with the online only retailers. I love Peapod for example they make it easy to shop with them and return items at the time of delivery to the dirver or call in for produts that have issues.