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The Perfect Online Returns Process is Within Retailers’ Reach—Here’s How

While satisfaction with online returns is generally high, frictionless returns are still far from a universal experience, according to a report published Tuesday by Narvar, a California-headquartered intelligent customer engagement platform.

Of the 3,519 online shoppers interviewed across the United States, United Kingdom, France, Germany and Australia, only 60 percent expressed satisfaction with their most recent return, meaning a “substantial portion” of online consumers worldwide still have gripes about the returns process.

This should concern businesses: Friction during the online returns process, Narvar notes, is hurting retailers when it comes to customer retention, since 13 percent of respondents said a negative returns experience could lead them to write off a company altogether. (First-time shoppers are roughly four times more likely than returning customers to rage quit.) Eliminating friction, on the other hand, allows retailers the opportunity to recover sales through exchanges and repeat purchases. When presented with options such as easy exchanges for different sizes or free shipping, for instance, a third of those polled said they “would be happy” to swap out their item instead of returning it for a refund.

In-store returns, Narvar added, are both an “opportunity and a point of failure.” The study found that 36 percent of shoppers think it’s easier to return an item to a store because they receive instant refunds and don’t have to worry about losing returns in the mail. Yet only 10 percent of shoppers actually returned their last purchase in-store.

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As such, Narvar thinks retailers could streamline the “buy online pick up in store” experience by offering more designated drop-off points—say, at a convenience store, a pharmacy or an Amazon locker—with a broader range of pick-up times for greater customer convenience.

The poll also discovered that transparency and the speed of refund can make the difference “between delighted and disappointed returners.” For 58 percent of respondents, a fast-and-easy returns process was their No. 1 reason for satisfaction. Another 35 percent credited updates about the status of their return as the second-highest contributor to a positive experience. Shoppers were most likely to downrate their returns experience if the refund took too long (28 percent) or they had to repeatedly look up the status of their refund (24 percent).

The perfect return for online shoppers, Narvar said, is free to the returner (including packaging and prepaid return labels), flexible (long return window, many convenient drop-off locations and no receipts needed) and transparent (replete with refund updates and tracking information).

“Returns are unavoidable. As consumers expect more from every element of their shopping experience, retailers are under pressure to perfect this part of the purchase journey,” Amit Sharma, founder and CEO of Narvar, said in a statement. “Every retailer needs a great returns strategy, and there is no one-size-fits-all approach. Today’s shoppers want options that cater to their lifestyle, so understanding their needs and giving them control over the process is key.”

Online returns are on the rise with the expanded e-commerce space. Statista estimates that the cost of returning packages in the United States will hit $550 billion by 2020—a 75.2 percent increase from 2016.