Retailers surrender to exceptional prices on online returns
Returning unwanted presents this vacation season is becoming so costly for retailers that they might let consumers manage the products — and give refunds nonetheless.
Why does it matter?
The price of online returns is flying, contributing to rising costs, product deficiencies, and supply chain tension.
The big shot?
According to Optoro, a returns processor, the average cost of returning a $50 item is estimated to be $33, an increase of 59 percent over the previous year.
- According to Optoro CEO Tobin Moore, worker shortages and supply chain issues are putting a toll on the company’s operations.
- According to CBRE Supply Chain, almost three out of ten internet transactions are returned.
It is believed that retailers would pass on the cost of returns to customers through increased pricing.
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- “The customer bears the cost of a free return,” Columbia Business School retail studies professor Mark Cohen said in an interview with Today.
Some businesses, such as Amazon, have a policy of telling returners to retain their items. Moore claims that it would be too expensive to handle a refund. However, do not attempt to cheat the system to get freebies.
- According to Moore, it is necessary to monitor customer behavior to identify whether or not they are taking advantage of the system.
State of play
Online merchants have several challenges, the most significant of which is processing returns efficiently and restocking their virtual shelves while avoiding depreciation.
- In Moore’s opinion, the sooner you can bring an item back into stock, the more money you’ll save on markdowns.
However, many online returned products are trashed, given, or recycled for resale via a different channel after they have been returned.
- Despite this, don’t weep any tears for your favorite stores this Christmas season. According to Mastercard SpendingPulseTM, they recently had an 8.5 percent rise in sales from November 1 to December 24, compared to the same period in 2020. It includes an 11 percent rise in sales on the internet.
What’s next: A rising number of buyers are returning goods purchased online to physical shops.
Stay tuned with us for more info and news!