It might seem counterintuitive for retailers to focus on returns when they are so focused on trying to convince customers to buy products in the first place (and rightly so). However, return policies actually have a major influence on whether shoppers go through with a transaction — particularly for increasingly popular online purchases. Nowhere is this delicate equation more critical than during the holiday season, when a larger proportion of purchases are gifts, raising the potential for mismatches of item and end user.
The good news for retailers is that when designed and executed well, return policies can deliver benefits that include bolstering customer satisfaction, reducing waste, easing internal business demands and affording insights into consumer data. And while establishing customer-friendly return policies might encourage shoppers to return more items, the payoff comes with higher levels of shopper loyalty. A liberal return policy also can boost shoppers’ confidence as they consider a purchase.
The stakes involved in getting returns right are high. International returns service ZigZag Global examined UK consumer shopping behaviors during the 2021 holiday season and found that one-third of consumers now purchase multiple items with the intention of returning at least one, and 59% will boycott a retailer permanently after a poor returns experience.
Top Return Trends for the Newly Extended Holiday Season
During a webinar titled Peak Review 2021 and Returns Trends 2022, Laura Davies, Head of Client Success, and Jason Taylor, Commercial Director at ZigZag, shared insights from the 2021 holidays that can help position retailers for a successful 2022 season.
Zig Zag laid out the pillars of a strong holiday returns policy:
- Begin holiday sales earlier;
- Extend the timeframe for returns;
- Offer eco-friendlier return options;
- Provide 24/7 access to return services; and
- Allow exchanges and refunds loaded to gift cards.
True early-bird shoppers prefer to have their holiday shopping nearly finished by the end of November: 83% of 2021 holiday shoppers under the age of 45 were finished with Christmas shopping by that time, according to ZigZag data. Starting holiday promotions earlier helps retailers attract these shoppers’ business. Additionally, “we had the uncertainty around supply chain capabilities, so it makes sense to encourage consumers to shop earlier,” said Taylor.
Offering a longer return window to shoppers will benefit retailers internally and promote a customer-friendly environment. Consumers will be more likely to spend money with retailers that make their lives much easier.
“Ninety-eight percent of consumers will process their returns within the first two weeks of receiving the order, so you really won’t increase your returns rate that much,” said Taylor. “It will help reduce the strain on your current network and can be a factor for winning more sales.”
Efforts to go green are resonating with consumers and return processes are no exception. Consumers are increasingly accepting of eco-friendlier digital receipts, and they offer additional benefits to retailers. “In the UK alone, 11.2 billion receipts are printed a year, equating to a staggering number of trees felled,” said Davies. Additionally, “[digital receipts] give you greater visibility into your shoppers’ behavior in store, so you can build a clearer picture of your customer. Thirdly, e-receipt emails achieve, on average, an open rate of 75%. This is 4X higher than traditional marketing emails so the upsell potential is massive.”
Return options available at any time of the day or night, such as through locker services, are more eco-friendly than forcing shoppers to return to a store location or use additional packaging for shipping.
“24/7 returns options were also popular during Christmas,” said Taylor. “We’re seeing a greater adoption of green return service options such as lockers. We even saw returns processed at 4 a.m. on Christmas Day.”
Retailers also should consider offering the option of loading refunds onto gift cards for their own businesses. With 78% of 18- to 25-year-old shoppers and 58% of UK customers overall choosing this refund option, retailers can satisfy these consumers while ensuring item refunds will be rerouted into their businesses.
Will Social Shopping Push Return Rates Even Higher?
As social shopping becomes more popular, retailers will need to align their return policies to accommodate these purchase patterns. Citing Instagram figures, ZigZag found that 60% of users reported discovering new products on the platform.
“While social commerce is a great way for brands to connect with their customers and tie their brand image with the right influencers, it will of course lead to more impulse purchases,” said Davies. “That mindless scroll that results in a quick unplanned purchase can be great for sales, [but] that reactivity could lead to higher return rates than those through your own website. It makes it even more important to have your returns policy easy to find and understand, as sales can come from a great number of channels and markets.”
In some cases, buying and returning an item is just part of consumers’ purchasing process. This is particularly true during the holidays, when promotions and limited-time offers proliferate. This was seen during the week following Black Friday 2021, when ZigZag saw a 129% increase in returned goods volumes compared to the same period in 2020. The value of goods returned increased by 74%, and 70% of returns were made due to issues with incorrect sizing.
“[In 2021,] Cyber Monday saw the highest level of returns of the festive period,” said Davies. “People were evidently returning one item while juggling purchasing the next, which is definitely how my brain works. If you’re returning something, then you’ve essentially earned the right to purchase something else.”