eCommerce platforms and stores are gaining a lot of traction. More and more of us are shopping online, which also means more and more exchanges and new return policies. But what does this mean for store owners, and what does the mean for consumers?

But Don't Customers Handle Returns?

In the past it was on the consumer to pay for a return or to deal with the hassle. You would be the one heading to the store to go through the process, or you'd be packaging the product back up and paying the costs at the post office. However, with the growth of direct-to-customer business, and the growth of the eCommerce world, the "hassle-free" returns and exchanges policies are becoming increasingly common. With retail giant Amazon offering unheard of policies, many other eCommerce businesses are having to follow suit to compete.

Is a Return Policy Really an Issue?

Some customers are ordering the same item(s) in multiple colours or sizes to figure out what they like the best, or what fits the best, and then returning the rest. Currently the return rates in physical stores are less than those of online retailers. Return rates are becoming unsustainable, especially for smaller brands. Brands are already having to compete with eCommerce giant Amazon, and Amazon is able to offer amazing policices. Because their focus is on growth, they're able to offer such generous policies.

What can be done?

Rather than cutting a return policy entirely, brands can find better ways to offer returns or exchanges to their customer base. To combat these issues, some retailers have been increasing the average order size to qualify for free shipping. Some have been adding better measures to minimize fraud. Those retailers with physical locations are encouraging shoppers to exchange their products in the brick-and-mortar locations instead.

Screen Shot 2019 02 15 At 12.08.17 Pm

Other retailers won't offer you your money back, rather they will give you a credit for their store to spend that money on something else instead.

Where do we go from here?

The real issue here is that some customers may stop shopping at brands that don't have generous return policies. Those retailers switching back to older more restrictive return policies will receive backlash, and that could be detrimental. But if nothing changes, then return costs will just continue to rise.