Skip to main content
holiday shopping
Inside WEX

Ecommerce and the Holiday Shopping Season: A Tale of Returns

December 1, 2015

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:

Follow WEX on Twitter for the latest in ecommerce and payments.

Stay connected

Subscribe to our Inside WEX blog and follow us on social media for the insider view on everything WEX, from payments innovation to what it means to be a WEXer.

"*" indicates required fields

Find out how WEX can help grow your business