There’s a famous quote, usually attributed to Benjamin Franklin, to the effect that there is nothing certain in life but death and taxes. Retailers might want to grimly add “and product returns” to that list of life’s inevitabilities.
The numbers back up this somewhat cynical assertion: the National Retail Federation (NRF) reported that U.S. consumers returned $890 billion in merchandise in 2024, equaling 16.9% of all purchases.
There have been a variety of technology solutions designed to make a dent in these numbers, with many focusing on pre-purchase fitting technology to decrease returns of apparel and footwear purchased online. While these have met with varying success, it’s clear that addressing the product returns problem will require a consistent, holistic, multi-pronged approach that takes into account virtually every aspect of the pre- and post-purchase process.
For more insights on how to prevent at least some returns from occurring in the first place, as well as strategies for mitigating the negative impact of the returns that do happen, check out the full report, Rethinking Returns: How to Tackle the Inevitable.
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Step One: Don’t Make Returns Harder than they Need to be
Retail, particularly online retail, is all about reducing friction: fast page load times, lots of product detail and simple, intuitive checkout processes. Retailers might be tempted to reverse this strategy when it comes to returns, erecting speed bumps that make the process a bit more of a hassle, but retail experts caution that would be a major mistake.
“Returns should be frictionless; the consumer deserves it and should be accommodated,” said Michael Brown, a Partner and Americas Retail Leader at Kearney in an interview with Retail TouchPoints. “Charges for returns should be on an exception basis only.”
Brown’s colleague Katherine Black, also a Partner at Kearney, emphasized that retailers should be more upfront, clear and transparent about their return policies: “Our research has found that 77% of consumers say the returns process influences how much they trust a brand,” shared Black in a recent Retail TouchPoints webinar.
Despite the important role returns play in building customer trust, many retailers still try to keep customers in the dark about specifics. “I think it’s fair to say that very few retailers are super-explicit about their return policy,” said Black. “Most keep their policies kind of buried in places where [the customer] has to seek it out, and I think that can create some confusion for customers — especially if it’s a big change from what it’s previously been, or it’s really different than competitors’ [policies] or the industry standard. I think it’s important to call it out in way that’s friendly and transparent for the consumer — and if [the purchase was] a gift, it’s probably even more important that policies be transparent.”
For his part, Brown is bullish on the potential of fit technology, not just as a tool to prevent returns but also as a customer relationship asset: “Fit tech has the most potential to reduce returns and increase customer loyalty and convenience,” he said. “Retailers that can capture specific body measurements can present consumers with the products that are best suited for their body type and size.”
Preventing Returns with ‘Really Authentic’ Product Reviews
Retailers also should make greater use of product reviews and other types of user-generated content as a return prevention measure. “Really authentic product reviews are another point of transparency,” said Black. “Consumers can really read about the product and make sure it’s a fit for whatever purpose they’re buying it for.”
User-generated content also can be powerful — if it’s both authentic and relevant. Black recommends “pictures of the product and, in the case of apparel items, [shown] on actual people so a person can really visualize not how an item looks on a size-zero model who’s a foot taller than they are, but someone who is actually their size, height and age range, to see how the item will actually look when they get it.”
And for those customers that use the increasingly popular buy online, pick up in-store (BOPIS) services, retailers should encourage them to try the products on when they pick them up: “This is a great idea, because you can short-circuit a lot of the complexities that come out of a return — once it leaves the store and goes home, that’s where the complexity really starts to explode,” said Black.
“The dream scenario is that a consumer picks [the item] up in the store, figures out if they want it or not, and if they’re going to make a return, makes it [immediately],” Black added. This eliminates much of the post-return cost for retailers, including re-integrating the item into their inventory and/or shipping it to another location where it has a better chance of being sold (and kept by its purchaser).
“Whether it’s ecommerce or physical retailing, there’s labor that has to be applied to each item returned, to assess the condition of the item and determine how to disposition it,” said Brian Ehrig, a Partner at Kearney and co-author of the report, 2024 Circular Fashion Index (CFX): Navigating Material and Product Choices as Key Unlocks to Circularity.“It is a quite costly part of their business.”
To learn more tactics for preventing at least some returns, as well as strategies for mitigating the negative impact of the returns that do happen, check out the full report: Rethinking Returns: How to Tackle the Inevitable.