Why returns are costing you more than you think…

It is easy to dismiss returns as someone else problem – someone in operations or the warehouse maybe.

But helping your customers keep more of what they buy is every retailers business.

Returns kill profits – and not just due to operating costs, but also because the impact of a return on customer experience and lifetime value can hit future revenue. If a problem product hits a new or high value customer, the impact is felt right across the business.

As the infographic above highlights, the costs associated with handling a problem product are only half the story.

The costs of acquiring a customer in the first place are rarely factored in to returns – yet some campaigns (like the one featuring this jacket) can directly cause returns.

But the real pain for retailers is the impact even a seamless return can have on customer experience.  Up to 80% of first time buyers never shop with a retailer again if they have to send back their first order.  That impact can be 2 – 10 times the operational costs of returns in the first year alone.

It is not really a sale until the customer decides to keep their purchase, so helping your customers keep more of what they buy – for example by spotting and acting on problem products and inaccurate descriptions – can only be a win win!

Posted by Vicky Brock