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Study Finds Half of Omnichannel Retailers Offer Free Return Shipping Despite Rising Costs

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omnichannel free return shipping

Free shipping is standard practice for omnichannel retailers looking for a bite out of Amazon’s market share. Now, offering returns at no extra cost has become de riguer, too.

According to the National Retail Federation’s (NRF) first-ever Omnichannel Retail Index, a report that examined the strategies of 120 retailers across multiple categories, half of those surveyed offer free return shipping—despite the higher costs that come with doing so.

“In an increasingly competitive landscape, retailers are taking a truly customer-centric approach to running their business and developing innovative solutions to meet their customers’ expectations,” said Vicki Cantrell, NRF’s senior vice president and executive director of Shop.org.

The report, prepared with digital consultancy firm FitForCommerce, studied retailers’ use of such omnichannel capabilities as in-store pickup for online orders, real-time inventory availability and mobile optimization in July and found that companies are doing whatever it takes to make the shopping experience as seamless as possible.

And with good reason: a recent Pitney poll of 1,000 online shoppers found that for 93 percent of respondents, shipping options are paramount to their overall experiences. But as The Wall Street Journal pointed out, extra fulfillment costs quickly stack up—and some courier services have upped their prices.

Come November 2, fuel surcharges for FedEx Ground shipments that exceed 150 pounds, are more than 108 inches long or more than 165 inches in length and girth combined will increase from $57.50 per package to $110 per package.

Meanwhile, UPS has adopted a similar increase which, according to estimates by supply-chain consulting firm Spend Management Experts, would raise the cost of shipping 100 shoeboxes by about $200.

“Brands and retailers need to or already are concentrating enormous resources on enabling the omnichannel customer, whether the brand or retailer calls it omnichannel or not,” said Bernardine Wu, CEO of FitForCommerce.

One way retailers are combatting the growing cost of offering free returns, the Journal said, is by choosing cheaper fulfillment options, like Newgistics, a third-party provider that relies on the U.S. Postal Service, or offering shoppers the option to return an online purchase to a local brick-and-mortar store.

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