Charging for returns will damage customer satisfaction

Boohoo, Next, Uniqlo, Zara… these are just a few of the fashion retailers that have announced the introduction of return fees to help them weather the increased costs of shipping. But the move could have a big impact on customer satisfaction, according to research we’ve undertaken in partnership with parcelLab.

Nearly 82% of UK consumers have returned an item purchased online in the last 12 months, showing just how big the returns business is. Those same shoppers state that offering free returns is a vital part of a good returns policy (view the survey). 

Nearly 60% of people ranked free returns as the most important factor for a good returns experience, putting it some distance ahead of the second-most important factor, speedy refunds (which only 15% of people ranked first). 

What’s more, of the 30.5% of people who said their most recent returns experience was bad (or could have been better), nearly a quarter said this is because they had to pay for the shipping themselves. It’s a growing trend; parcelLab’s own research of 200 UK ecommerce retailers found that 24.5% charge for returns (up from just 11% in 2021). And when the customer is paying for returns, the average amount is £3.53

Long refund times also damaging customer relationships

Charging for returns aside, there’s another industry trend that’s having a negative impact on ecommerce. Nearly 39% of consumers who were disappointed with their returns experience said that the retailer took a long time to process their refund. Speedy refunds are ranked as the second most important factor in a good returns policy but parcelLab data shows it takes 9 days on average for a refund to be made.

Behind refund time, the next biggest complaint is having to print out a shipping label (28.1%). Many households don’t own a printer these days, and the expectation to be able to do everything digitally is higher. Paperless returns were ranked as the third-most important factor for good returns, yet 87% of the retailers in parcelLab’s research don’t offer a paperless service. 

With that being said, consumers are demanding when it comes to retailers’ returns policies, placing two other factors in joint third place: a generous timeframe in which to make the return, and a variety of returns options/locations. The ability to track returns came in fourth place, but was deemed only fractionally less important than the factors in third place. 

Don’t make shoppers visit a store

For retailers with physical outlets, allowing online shoppers to make returns in-store and avoid shipping fees seems like a good idea. Of the retailers included in parcelLab’s survey, 51% offer in-store returns, but our data shows this is not actually a top choice with consumers. 

Out of five options, in-store returns was rated only fourth, favoured by 19.4% of shoppers. Most popular – perhaps surprisingly – is an old fashioned post office return (27.6%), followed by a drop off return such as DPD or Collect+ (24.8%). Collection from home is preferred by 20.8% of people, while taking returns to a locker is the least popular (7.4%). 

It’s certainly important for retailers to work with a logistics partner with a big network; having to take their return somewhere inconvenient was a bugbear for 21.6% of shoppers who had a bad returns experience, while long queues bothered 10.5%.

For the most part, retailers are doing well

On a positive note, nearly 70% of consumers in our survey said the last return they made was a good experience. We also found very low incidences of parcels going missing (3.9%), retailers disputing returns or only offering credit instead of a refund (both 6.5%).

Retailers are mostly doing a good job, but for those who want to improve the customer experience even further, the research did throw up some other opportunities. Nearly 21% of people struggled with their return because the process was complicated, and an additional 20.9% were frustrated by being unable to speak to anyone about the return. 

As more retailers introduce shipping charges, ensuring the returns process is simple and providing support is likely to become particularly important for retaining customers. While consumers might make allowances for a free returns service, when they’re paying it, expectations will, of course, be higher.