Following news that Boohoo will join Next and Zara and start charging for online returns, indies will be wondering if they can also reduce costs by implementing a similar strategy. Experts are warning, however, that doing so will cause an inevitable backlash from shoppers who are already facing rising costs across products and services.
Ed Whitehead, MD EMEA at e-commerce fraud protection firm Signifyd, recommends fashion retailers consider other methods of reducing returns rates before adding additional fees:
“With the increase in online shopping, and subsequently customer returns, brands are finding themselves in a difficult situation when it comes to offering free returns,” he says.
“This is particularly true in the fashion industry, where one in three items bought online are returned. And as cash-strapped customers re-evaluate their spending habits – often backtracking on non-essential purchases – amidst the growing cost-of-living crisis, charging customers for returns is bound to be extremely damaging to customer experience. Online-only brands such as Boohoo will face the most backlash, as customers are left with no choice but to pay the fee to return items.”
“He adds: “At a time when customer loyalty has never been more vital for brands, initiatives like this will undoubtedly have a negative impact on genuine customers, and will likely deter them from shopping with certain brands again. This threat is very real, as found by a recent Signifyd survey of 2,000 UK consumers in which almost three-quarters of respondents said they would abandon a brand and move to a competitor after a negative online experience.
“Instead of shifting the consequences onto customers, retailers can look to other options for easing the costs of returns. Turning to data and machine learning to instantly sort through risky and low-risk returns allows merchants to provide a top experience for customers making returns for legitimate reasons, while weeding out those refund requests for those looking to take advantage. This then allows genuine customers to continue shopping hassle-free online and return items free of charge.”