The Disappearing Era of Free Returns – How New Policies Impact Retail

Bask in those post-purchase endorphins all you want, but beware – the golden age of no-questions-asked returns is waning. As ecommerce exploded in recent years, lenient return policies helped fuel spending sprees. But handling surging item volumes has become increasingly costly, prompting retailers to crack down. Return shipping fees are rising and once generous windows are narrowing. For frugal shoppers used to bracketing items, this shift will change behaviors. In this new era, product depictions must inspire confidence pre-purchase. Trust will separate those who tighten policies judiciously from merchants eroding loyalty through friction.

The era of effortless ecommerce returns is coming to an end. As online shopping exploded in popularity over the last few years, lenient return policies helped fuel purchasing. However, processing skyrocketing returns has become increasingly costly for retailers. As a result, companies are starting to crack down by adding return shipping fees or shortening return windows.

According to estimates, returns cost retailers about $405 billion in 2020 alone. Return rates have climbed over 15% from pre-pandemic levels. Various factors contributed to this spike – such as the rise of bracketing, buying multiple sizes or colors with the intent to return some.

Nearly a quarter of retailers now charge for return shipping, up from just 19% in 2021. Major retailers like Amazon, Target, and Walmart have recently updated policies to add fees or tighten return rules. Amazon itself paid over $84 billion to handle returns in 2021.

Key Points

• Pandemic fuel growth caused return rate spike
• Added fees and compressed timing make returning items harder
• Burden shifts to shoppers to prevent buyer’s remorse
• Retailers balance cost management with experience
• Marketers boost confidence via content and community
• Future policies flux with costs and consumer patterns

Tighter Return Policies

Many retailers have shortened the return window from 30 days down to just 14 or 15 days. Others have added return authorization processes or limited the number of returns allowed without a receipt.

Some companies have even experimented with “returnless” policies for certain goods – offering credits instead of returns to reduce costs.

The fees being introduced for return shipping generally run from $4 to $10 per package. Items must also usually be returned in salable condition with tags still attached.

Impact on Customers

For customers, the disappearing era of free returns means more careful consideration before purchase. Bracketing items will carry extra costs if unused items are sent back.

Review return policies closely before buying, and know the exact return window to avoid late fees. When possible, utilize free in-store return options rather than paid shipping.

The added friction may very likely reduced overall return rates – but could also decrease customer satisfaction and loyalty if policies become overly strict. Retailers must strike a balance between managing margins and maintaining a positive customer experience.

The future of returns in the ecommerce landscape remains in flux. As costs, technologies and consumer behaviors continue evolving, companies will likely continue tweaking policies. Customers should stay savvy about the latest changes impacting returns when shopping online.

Consumer’s Legal Rights

While return policies are getting tighter, customers should still be aware of their legal rights when it comes to online purchases. These protections apply across all retailers and outline mandatory requirements that stores must comply with.

The Federal Trade Commission (FTC) requires mail order sellers to provide clear notice at the time of purchase if they have a no refund or exchange policy. Shoppers should be explicitly informed if any items have special considerations around returns.

Even without a stated return policy, the FTC mandates that retailers must legally accept returns and provide refunds when goods are:

• Defective or damaged
• Significantly not as described
• Never delivered

So customers are still protected from being stuck with broken, incorrect or unreceived orders, regardless of the listed policy. However, changed mind returns or purchases that simply don’t meet expectations are at the retailer’s discretion.

When investigating an issue with an online retail transaction, customers can submit formal complaints to agencies like their state attorney general’s office or the Better Business Bureau. So be sure you understand your rights in any transaction.

Knowing the required return protections under law empowers customers during purchases and helps avoid situations where faulty expectations cause friction on either side. While policies adjust to business needs, legal rights stand firmer ground.

Impact on Advertisers and Reducing Returns

For advertisers and marketers, the shifting online return landscape requires some strategic adjustments. As returning items becomes more inconvenient for consumers, campaigns should aim to minimize unnecessary returns.

Boost Confidence Pre-Purchase

Content plays a crucial role in depicting products accurately to avoid disappointment. Showcase items in real-world settings with videos and user-generated photos.

Provide detailed sizing information, fabric details, and high-resolution images from various angles. Enrich product descriptions with graphics showcasing features.

Guide customers to the best style or size for their needs. Consider an online quiz or smart recommendation engine based on purchase history data.

Emphasize Value Over Price

Shift messaging from sales and sitewide discounts which tend to encourage overpurchasing. Instead highlight product quality, durability and styling versatility.

For higher priced items like luxury apparel, focus on cost-per-wear and investment value. Lower return rates help justify higher prices.

Pro Tips on Returns

Proactively addressing returning items as part of the broader customer experience can build loyalty and uncover merchandising improvements.

1. Offer hassle-free return options like printable shipping labels, dropped-off returns, and expedited refunds. The easier you make returns, the more likely customers will buy again.
2. Provide store credit or exchange options immediately during the return process. This increases the likelihood customers will re-spend the money with you rather than elsewhere.
3. Set up return stations in stores so customers can drop-off items easily. This drives additional store foot traffic and potential impulse purchases.
4. Implement partial return authorizations to allow customers to keep some items while returning others. This reduces lost sales from all-or-nothing rules.
5. Inspect returned merchandise quickly to accelerate processing for items that can be resold. Fast turnaround maximizes recoverable value.
6. Discount open-box or refurbished items on your website to appeal to bargain hunters and environmentally-conscious shoppers.
7. Analyze return data for patterns around sizing, fit, quality concerns, buyer’s remorse items etc. Then feed insights back to merchants, designers and site content.
8. Train customer service staff on encouraging exchanges rather than just refunds where possible during the returns process.

Leverage Influencer and Community Content

In-depth reviews from micro-influencers build authenticity and trust. Expert videos discussing use cases and product comparisons help customers select the optimal items.

Spotlight user-generated visuals confirming products work as expected. Feature curated customer testimonials praising favorites.

Providing richer upfront information through owned channels, partnerships and communities pay dividends in confidence and conversion. Proactively address buyer concerns before checkout rather than via returns.

While the ease of ecommerce returns initially hooked shoppers, swelling volumes have strained retail margins – triggering a tightening wave. Striking the optimal balance between financial and customer experience pressure points remains imperative. As returning items becomes less frictionless, the power shifts to marketers and merchants to proactively nurture confidence before checkout. Those who emphasize value, tap communities and match purchasers with products poised to delight may very well cement loyalty in the process.