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A quarter of online retailers could be affecting their customers' loyalty by failing to provide information about how they can return unwanted purchases, according to a new study.

E-commerce solution provider Snow Valley assessed 70 UK e-commerce companies and found that a sizeable minority didn’t provide decent directions about how to send purchases back.

Twenty six percent of brands enclosed no return instructions with the goods and only a third displayed a link on their homepage containing the word ‘return’.

However, once goods had been sent back, 90% were able to process returns and refunds without further action from the customer and half of the refunds were made within two working days.   

Predictably, clothing retailers performed well – they were more likely to cover the cost of the return (69% did so) and all provided return instructions with the order.

But retailers seemed divided over whether they should promote their returns processes, even if they have designed them to be as easy as possible for shoppers.

The report added:

  • Four in ten firms paid the cost of returning goods through post-paid labels, freepost or couriers.
  • Only 17% refunded the original delivery charge.
  • 39% of retailers with offline stores did not allow shoppers to return goods bought online to their outlets.
  • Half sent notifications to customers that their refunds had been made.
  • Six out of ten surveyed said that retailers “should actively promote a hassle-free returns policy”. 
  • Interestingly, 40% said they “should not necessarily promote a hassle-free policy but they should have one”.
  • Six firms had online returns management systems in place, allowing customers to log their return before sending the goods back.

Carlo Rimini, MD of Snow Valley said:

“Our research shows that there are three types of retailer when it comes to returns. There is a ‘hassle free and proud of it’ set like Boden that actively promote their returns policy to attract new customers.

“Then there are the retailers like Amazon that keep relatively quiet about returns but once the customer puts the wheels in motion they’re very efficient. And lastly, there’s a group that seems to actively try and make returns difficult for the customer.”

Other recent studies have also looked at how returns policies can affect customer loyalty and satisfaction, and seem to conclude that they can have quite a large impact.

A survey by Pricerunner suggested many online shoppers were unhappy with returns processes.

And back in 2004, Harris Interactive said that 85% of customers would not return to a retailer that didn't have a convenient returns policy.


Published 24 October, 2007 by Richard Maven

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