The Cost of Returns for E-Tailers
When asked by
to compare on average the difference between in-store and online returns, David Sobie (Co-founder and CEO of Happy Returns) estimated that the percentage of brick and mortar items fell by around 5-10%
; whilst the number rose to 15-40%
for online purchases. Tobin Moore (CEO of reverse logistics technology company Optoro) added that with the global rise of e-commerce purchases, the number of returns would skyrocket to over a trillion dollars a year.
Whether a product is bought online or in a store - returns pose financial and logistics stress for retailers. Stores have to deal with operational costs which include ensuring the returned product is inspected, handled, and geared for resale. This is not only costly in terms of money, but it’s time-consuming as well.
And then once the returned product has gone through the necessary operational steps to be resold, what then? According to
, less than half of returns are resold at full-price. One of the reasons for this is customers returning an item at the end of a season. For example, it’s difficult to sell a summer-style dress in fall. This problem poses an extra loss for retailers.
On top of all of that, the store is left with an unhappy customer.