When it comes to shopping online, a multitude of factors ultimately determine whether a conversion is eventually made—but, according to a new survey, a consumer-friendly returns policy may play a larger role than most companies think.
As many as 52 percent of consumers have abandoned purchases online because they deem the returns policy unfavorable or difficult, according to a survey by consumer installment payment solutions provider Splitit done in conjunction with Google Consumer Surveys.
With more than $400 billion worth of returns recorded in 2018—roughly 25 percent of which occur during the holiday season, amounting to around one million packages returned to e-commerce retailers a day in December—understanding the way return policies impact conversions can be crucial to protecting a retailer’s bottom line.
“Whether it’s a fear of buyer’s remorse or uncertainty about fit, our research shows that, today, returns are a top consideration for consumers even before their purchase is completed,” Splitit CEO Brad Paterson, said in a statement. “More than ever, we are seeing the importance of an easy return process to give consumers peace of mind and increase revenue, as returns are determining purchases long before a customer reaches checkout.”
Nearly 60 percent of consumers have returned an online purchase in the past, and 38 percent of those who responded to Splitit’s survey said they have returned up to 10 percent of all their online purchases. Some consumers also utilize an online shopping method the payment firm calls “bracketing,” where they will purchase multiple similar items with the intention of trying the products out and then returning a large portion of the overall purchase.
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Millennials are even more likely to take into account difficult return policies, as 67 percent of the 24 to 35 age group said they have abandoned purchases because of this, compared to 52 percent overall. Twenty percent said a return shipping fee would make them less likely to make a purchase and 39 percent said that free shipping was the most important feature of a return policy. Another 30 percent said that “no questions asked” was the most valued return policy feature.Ten percent of all consumers said they were dissatisfied with their most recent returns experience, suggesting room for improvement in a competitive retail environment.
“By combining a simple and transparent return policy with flexible payments options like installment payments or buy now, pay later solutions, retailers are able to give consumers the confidence and the time to make the right purchase without creating a burden on their finances,” Paterson said.
The onus on retailers to handle returns doesn’t stop with an easy, hassle-free experience, however.
Another survey conducted by The Harris Poll and Threekit, a product visualization platform, found that consumers also expect retailers to be responsible for the environmental impact of returns. A December survey of 2,007 U.S. adults aged 18 and older found that 82 percent believe online retailers have a responsibility to do “all that they can to reduce returns” in order to limit this impact.
According to a UPS report, returns generate roughly five billion tons of trash and 15 million metric tons of carbon dioxide every year, a problem that will only get worse as the culture of online shopping and returns continues unabated. However, considering the vast majority of consumers consider the influx of returns a retailer problem while simultaneously desiring a free and easy return process, a business-side solution is likely necessary.
Threekit, for example, works to improve the online shopping experience with higher-quality imagery, including 3D images and augmented reality, to provide a more true-to-life profile of a product before it ever arrives on a consumer’s doorstep. To demonstrate that point, The Harris Poll and Threekit survey found that 76 percent of all respondents would be less likely to return or exchange an online purchase if they were provided with a more accurate product image.
“More than 64 percent of shoppers report returning purchases because the items did not match the description or their expectations, according to Statista,” Ben Houston, Threekit’s founder and chief technology officer, said. “We’ve seen from our customers that the simple act of providing more and higher quality product images reduces the rate of returns by as much as 40 percent. It’s clear that the e-commerce industry is falling short, and our planet is getting stuck with the cost.”
To play its part in reducing returns, Threekit is calling on Amazon to adopt more detailed and accurate product descriptions. Amazon represents about 49 percent of all e-commerce purchases in the U.S., according to a 2018 eMarketer report, and its position as the retail front-runner carries incredible weight in the industry.
Threekit’s call for better standards includes featuring at least eight images per product page, the support and promotion of 3D product configuration and support for augmented reality shopping when it comes to furniture and home appliances.
“This isn’t about companies just using Threekit to solve this problem,” Joachim Klein, president and chief operating officer of Threekit, said. “Rather, it’s about our unique vantage point: through our work, we see how companies that adopt better product visuals massively reduce their ecological footprint, and we want to challenge others to do the same.”