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Posted December 1, 2015

holiday shopping


With nearly a trillion dollars expected to be spent during the 2015 holiday shopping season, according to Deloitte, ecommerce shopping will make up a fair portion of the shopping, roughly $64.7 billion. However, there is one worrisome statistic: $19.4 billion, or 30 percent of online gift purchasing, is expected to be returned.

Whether it’s considered bad gifting or failure by ecommerce businesses to set and meet expectations (only 8.89% of brick-and-mortar purchases result in returns), the returns process could be the difference between a customer for life and a customer never to return, as 85% of customers will not do repeat business if the return process is inconvenient.

Three Problems Leading to Returns

Whether buying a gift or purchasing for yourself, setting expectations is the first step to reducing your return rate. According to a recent infographic by Shorr Packaging:

  • 25% of Returns: “The Product was Not What I Expected”
  • 17% of Returns: “The Product did Not Fit Properly”
  • 16% of Returns: “The Wrong Item was Delivered”

To combat this, the infographic recommends the following:

  • Product Videos: Returns for dropped 3% when shoppers viewed a video
  • User Reviews: Petco saw a 20.4% drop in returns in products that had been reviewed vs. those that had not
  • Interactive Tools: By introducing a sizing app, ASOS saw a 50% drop in returns

Could Free and Easy Returns Build Loyalty and Increase Sales?

Although nearly half of customers will actually keep a product if the return process is complex and inconvenient; a costly, short-window, or complex return process hurts sales for retailers:

  • Costly Returns Cost Sales: According to research from Washington & Lee University’s Williams School of Commerce, when a customer had to pay to return a product, purchases decreased anywhere from 74 and 100 percent. On the other hand, companies that offer free shipping on returns can see between a 58 and 357 percent increase in sales in the next two years.
  • Extending the Return Window Instills Consumer Confidence: With many customers making returns 2-3 days before the end of the return window, extending said window creates trust and in turn, sales.
  • Providing a Clear Return Policy Benefits Business: As 63% of customers check a return policy before making a purchase and 48% would shop more at retailers that offer hassle free returns, providing a clear, customer-focused return policy could bump sales in the right direction.

Simplifying Ecommerce: From Purchase to Payment to Return

No matter the stage in the purchase, the length of the purchase cycle, or the product or service being purchased, making ecommerce easy is a boon for businesses.

Learn more about the trends in ecommerce, social payments, and the ongoing quest to simplify the payments process using the resources below:

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Corporate Payments Insights

Corporate Payments Insights