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What every indie should know about the state of e-commerce returns

A hallmark of online retail is the increasing reliance on free returns by customers. According to ParcelHero’s research, 83 per cent of people are more likely to use an e-commerce store if they have an easy to use return process.

Great return rules give customers flexibility when they shop. As the popularity of online shopping goes from strength to strength the more returns shops receive returns. ParcelHero’s research reveals that over 50 per cent of shoppers believe that stores should cover the cost of returns regardless of the reason.

While free returns for customers are clearly appealing, it is increasingly the stores who foot the bill. Returns are costing UK businesses over £20 billion each year.

With so many e-commerce stores reliant upon good reviews, they are often left with little option but to return unwanted orders with no questions asked.

January is by far the busiest month for returns. Many businesses feel the strain due to the amount of non-wanted presents and sale items. ParcelHero expects around 200 smaller businesses to fold as a direct result of returns in the aftermath of Christmas.

Some online retailers disclosed to ParcelHero they were coping with return rates as high as 60 per cent this Christmas. This ratio will eat into the profit margin of any company, but it is smaller businesses who are most heavily impacted. If small businesses decide to charge for returns they run the very real risk of customers switching allegiances and buying from the large e-commerce retailers who are already eating into the consumer base of these businesses.

Over 80% of the stores ParcelHero contacted while building their report told them that they are very concerned about the increasing levels of customer returns. With that in mind, what options do businesses have when deciding how to deal with returns?

One clear difference for customers buying online rather than in-store is the fact that they (for the most part) are automatically covered by a 14-day cooling off period when they can return their goods no questions asked during this period. They are also covered by the 30-day faulty goods consumer rights act. This entitles all customers to return any faulty items for a refund or exchange during the 30-day period.

If the item is simply unwanted, stores do have some leeway. Some retailers will still refund or exchange the item, but it is left to the discretion of each store.

As damaged and faulty goods are covered by the 30-day consumer act, it is wise to ensure you pack your parcels well.

ParcelHero advises eCommerce retailers to follow these steps:

  • Use a brand new, double corrugated cardboard box
  • Wrap each item individually in bubble wrap, and suspend them in plenty of packing peanuts or a similar protective material
  • Use plenty of packing tape, especially on the seams and corners of your box

If your item is damaged during transit you can claim back the value of the goods if you can prove that your item was properly packaged. Some retailers video their packaging process to prove that they packaged the items correctly. ParcelHero warns that couriers can take up to 28 working days to process your refund.

Photo by Maarten van den Heuvel on Unsplash