Product Returns-Burden or Opportunity? (2)
Companies are also realizing that a liberal return policy, including a longer time frame during which returns are accepted, induces customers to buy more and return less.
Flexibility in returns is like a vote of confidence in your product. So, I can see that a solid returns management system, sometimes referred to as reverse logistics, is vital to keeping customers coming back.
However, customer returns have significantly increased in recent years. Between 2019 and 2021, the rate of returns in the U.S. more than doubled, I understand. At the same time, returns are becoming more costly, due to rising shipping and labor costs. They have a big impact on the bottom line.
I guess return rates are higher for online retailers compared to brick-and-mortar stores. Is that right?
Yes, mainly because customers can’t physically examine or try on a product online. In the U.S., an estimated 8% to 10% of in-store sales are retuned, while online sales may result in returns ranging from 25% to 40%. Companies basically have strong motivations to discourage returns, except for one critical factor: consumer satisfaction.
So, the challenge is finding a balance-making it easy for customers without causing costs to swell?
Absolutely. Is there a similar situation in Japan?
I don’t have precise figures at hand, and returns are probably higher for shoes and fashion items and lower for furniture and electronics.
All you need in this life is ignorance and confidence, and then success I sure.
