Ask any retailer or consumer and they’ll agree on this point: ecommerce returns are a problem — albeit for diametrically opposed reasons.
The cost of returns keeps ecommerce operators awake at night — so much so that some large retailers have adopted a “just keep it” policy towards certain purchases, opting to issue a refund without asking for the merchandise back (a trend that may prove unsustainable for both margins and the environment if consumers come to expect it). Meanwhile, more than three in four (78%) consumers say they’ve had an inconvenient online returns experience recently, per Pitney Bowes latest BOXpoll survey.
So how can one aspect of ecommerce be so universally reviled — and yet be poised to grow? Pandemic-driven online sales growth has brought with it an increase in online return volumes.
With 2022 in contention to be the year things “finally, actually” return to “normal” (if we even remember what that looked like!), we took a look at four ways we expect the area of online returns to change this year.
Consumers are Split Between Home Pickup and Carrier Drop-off
With COVID concerns easing earlier last summer, consumers felt unshackled and were looking for any excuse to leave the house. As a result, drop-off (at a carrier or retail location) became the preferred returns method for 67% of consumers, according to our BOXpoll surveys.
More recently, as of December 2021, nearly half of consumers (46%) told us they’d be likely to use home pickup for returns if offered the option, and only 30% are unlikely. Meanwhile, 57% of parents are likely to use home pickup versus 41% of others.
Where consumers live has a lot to do with which returns process they prefer. Half of all shoppers (53%) live in a location that makes home pickup easy, but there’s a stark generational divide. While about 60% of Baby Boomers and Gen Xers live in pickup-friendly locations, that percentage drops into the 40s for millennials and Gen Zers.
Apartment dwellers say they are either unable to leave a package on their doorstep or not comfortable with the idea. Some consumers (10%) said they are likely to keep an online purchase if home pickup required them to leave the package out for the carrier. Unscheduled pickups can turn shoppers away, with nearly 20% of all consumers and 30% of Baby Boomers saying they are less likely to buy from that retailer again.
The Post Office Increases its Popularity as a Returns Drop-off Destination
U.S. consumers love the USPS. Among millennials, Gen X and Baby Boomers, the Post Office was ranked as the number one preferred drop-off location by more respondents to our BOXpoll survey than any other location (including retail stores, UPS Store, FedEx Office, parcel lockers and mall kiosks). As the performance of the USPS came to be lauded over the holidays for 96.5% on-time deliveries — better than other major carriers — expect this returns preference to benefit from a halo effect.
Printing Return Labels Becomes Even More Uncommon
More than half of all consumers (59%) and more than two-thirds of Gen Z shoppers (71%) say they either don’t own a printer or prefer not to use it to print labels at home. This is a big contributor to consumers’ number one complaint about returns: the label not being included in the shipping box. The growing availability of QR code solutions for printerless returns drop-off will increasingly address this trend.
The Returns Season Gets Extended
While supply chain disruption pulled holiday shopping earlier than ever, 2021 saw gift cards come a long way from their previously held titles of “most lukewarm reception on Christmas morning” and “most likely to be given by a distant relative.” Gift cards grew 27% over the 2020 holiday season and came to represent nearly 40% of gift purchases. Purchases from gift cards, according to our surveys, will primarily occur over the first two months of the new year, pushing returns and exchanges from those purchases…about 60 to 90 days further out.
Dialing up the Convenience…or the Friction
With consumers split on what a convenient returns experience looks like, retailers can use this data to their advantage. Those merchants looking to lower returns rates can position non-preferred return options as primary methods (or hide others if your returns portal allows) to add ‘just enough’ friction to the returns process. Retailers that can identify frequent returners can even start to introduce returns shipping charges (or restocking fees) selectively. Our BOXpoll surveys found that nearly 40% of customers compared paying for returns shipping to a lion biting off their leg.
Meanwhile, retailers looking to maximize convenience can flip these findings around — and prioritize the most convenient options for the right consumers. Higher-spending, more urban consumers prefer home pickup. Suburban and lower-AOV consumers either prefer or can only use returns drop-off. Simply providing multiple options — free home pickup or drop off, label print on-demand or via printerless QR code at a carrier location — maximizes the chances a consumer won’t get frustrated.
Vijay Ramachandran leads Product Marketing for Pitney Bowes Global Ecommerce, responsible for identifying market trends and insights that lead to faster and more cost-effective ecommerce operations, better post-purchase consumer experiences and more nimble cross-border ecommerce strategies. Pitney Bowes Global Ecommerce offers ecommerce fulfillment, parcel delivery, returns management and cross-border logistics and technology. Prior to joining Pitney Bowes, Ramachandran was head of brand and product marketing at Manhattan Associates, an enterprise retail technology company. He has nearly 20 years of experience in ecommerce technology and logistics.