Increasing Returning Rate And Their Reasons
The rise of e-commerce and online shopping has led to an increasing number of returns. According to the National Retail Federation, the online return rate as of September 2022 stands at 20.9%, which is slightly higher than the previous year's rate. In 2021 and 2020, the rates were 20.8% and 18.1%, respectively. This data suggests that the online return rate has been growing over time.
CouponBirds conducted a survey of 2,498 online retailers to identify the most common reasons for returning items. Among the order samples, 80% of consumers reported that the primary reason for returning was that they were damaged or broken before opening the package, or within the warranty period. Additionally, 64% of consumers reported that the product did not match its description, while other reasons for returning items include not liking the product (37%), poor value or quality (8%), and late arrival (7%). These reasons are key factors that contribute to the high return rates in online shopping.
Many online retailers implement free return policies to attract more customers and increase confidence in the quality of their products. However, when returns occur, the situation can become complicated for both parties. In response to this issue, retailers and customers have made adjustments to mitigate derived problems.
Specifically, 73% of retailers now offer customers a chargeback option instead of returning the product. This approach has been successful, with 81% of customers selecting chargeback and only 19% opting to return the product. CouponBirds surveyed 356 customers to identify why they chose the chargeback option. Results indicated that two-thirds of respondents cited convenience as their primary reason while one-third stated they were engaging in friendly fraud, falsely claiming orders were made to the wrong address or were not satisfactory, for a little benefit.
While increasing returns are an inevitable result of the growth of online shopping, it is important to recognize that this process benefits both retailers and customers by protecting their rights during the shopping experience. With a better understanding of each other and more effective adjustments from both sides, the process of online returns can continue to improve.
