The rate of returns in the US continues to increase with no end in sight. Shifts in consumer behavior and the changes to retailer return policies to satisfy consumer preferences are fueling the increase. And the gap gets wider and wider.
Cost of Returns and Industry Issues
As you can see, returns can cause some serious industry issues, such as a reduction in margin percentages, or an increase in labor cost.
Buy online and return in-store (BORIS) returns are also a big problem for retailers with 38 percent of retailers seeing a rise in BORIS returns in 2018.
The Great Returns Divide Grows, But Why?
We are almost at the midpoint of 2019 and Memorial Day is right around the corner. What does that mean? Lots of Memorial Day sales. This is great for retailers when looking at the upfront profits. However, what happens on the backend should be the focus.
Historically, return rates skyrocket after any holiday sale, from Black Friday to Memorial Day. There are plenty of reasons why this happens, and none of them matter. Retailers will not be able to fix the increase in holiday sale returns, because they need to ensure the customers are confident to buy.
And what better way than a 30-day, or even 60-day, no questions asked return policy.
To test this, we went to a few of America’s top retailers and asked about returns policies on high ticket items like laptops, TVs, and video game consoles. Most employees said without hesitation, “You can return it within 30 days.”
We pried a bit more. We asked, “We can open the box, play it for 28 days and return it?” The employee humbly said, “Yes, that’s no problem.” This is the dance retailers and consumers do day-in and day-out.
Key Returns Stats and Why They’re Not Good
Many retailers have come to the conclusion that returns will need to be addressed in the next decade or so. The growth of ecommerce and the rising return rate are certainly not going away. What’s the solution savvy retailers have come up with? Reverse logistics and returns management.
But this is where the great returns divide takes an odd turn. Consumers will ultimately be consumers. There’s no plugging that leak. So retailers need a solution on their end, which comes in the form of reverse logistics. And nearly two-thirds of retailers agree that reverse logistics is important.
However, when it is time to put the investment into a reverse logistics program that can make returns somewhat profitable, less than 10 percent are willing to put money on the table. Not good.
Luckily, goTRG makes it easy for retailers to maximize recovery on returns with the fastest sell-through in the reverse logistics industry. Using SaaS technology, supported by machine learning and AI, we help retailers reduce movement of returns and touches. We are also leaders in ecommerce and supply chain.
Nearly all the top retailers in the world trust goTRG business solutions and SaaS to handle their returns. Why? Because when you need it, we’re the ones that get it done!