WSJ: Rampant Returns Plague E-Retailers

The Wall Street Journal reports that along with the boom in ecommerce shipments has come a flood of returns:

Behind the uptick in e-commerce is a little known secret: As much as a third of all Internet sales gets returned, according to retail consultancy Kurt Salmon. And the tide of goods flowing back to retailers is rising. Shipper United Parcel Service Inc. expects returns to jump 15% this season from last year, making them a significant and growing cost for retailers.

The stakes get even higher during the holidays, when return volume peaks. So this year, chains are digging through past transactions to weed out chronic returners, train shoppers to make better decisions or stem buyer’s remorse.

The Journal says that e-retailers are coming up with imaginative tactics to deal with customers who return large numbers of orders:

constant returners may see fewer discounts in their inboxes, while their high-spending neighbors land the better offers.

The rise of free shipping and returns has coincided with a surge in online sales of clothing and footwear. In the past, retailers would charge online shoppers $5 or $10 fees for delivery and returns to cover the cost of shipping and handling. The rise of more lenient policies by online shoe retailer and parent company Inc. helped prompt customers to turn their living rooms into dressing rooms, as shoppers in many cases aren’t on the hook for shipping fees in either direction or the back-end cost for returns.

Retailers say people who return a lot also typically buy a lot. But that isn’t always the case, and the burden appears to be growing.

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  • mailmandavee

    I have had almost half the items delivered to me either damaged by the shipper or just the wrong item. I have yet to return anything just because I did not want it. I have had all issues resolved with no problems except having to wait for the part or replacement.