Two out of three consumers abandon online orders in absence of return policy

After a record-breaking peak season, a £7bn returns nightmare is threatening to punch a hole in online retailers’ post-Christmas revenues.

While 49 percent of UK consumers say they return products when they are not satisfied, 67% also admitted to abandoning their online orders when there is no return policy available, according to research by Sendcloud.

Complicated return policy only results in losers

With returns often costing time, money, and involving plenty of paperwork, both retailers and consumers alike are finding returns a headache to deal with – 58% of UK consumers indicated that returns are a big hassle to them.

More than half (55%) believe it is up to the retailer to arrange and pay for a product return, with most consumers (75%) expected to be reimbursed within a week of sending items back.

The lack of a clear return policy is becoming a missed revenue opportunity for online retailers. Three-quarters of consumers said they would order more frequently at stores if they offered free returns, while 71% said the same if returns were made quick and easy.

The most important aspects of the return policy to consumers were the cost (70%), providing a returns label (61%), and information on when they can expect to receive a refund (53%).

“Retailers often preconceive the returns process to be a real headache and are sometimes tempted to make their return policies more complicated in an attempt to reduce returns,” said Rob van den Heuvel, CEO, Sendcloud. “However, the exact opposite is true as our research has proved that a simple and clear return policy is actually key in driving conversions. In fact, what we’ve found is that retailers which offer a longer return period result in fewer returns because customers are less concerned with the product that still has to be returned! All in all, a simple and clear return policy actually pays off.”

Four tips for the ideal return policy

A returns policy is therefore essential to win over consumers. But what do consumers want to see to be convinced?

1. Free returns: it’s no surprise that consumers love the word ‘free’. Even when it comes to returns, consumers prefer to see the retailer take care of these costs. No less than 67% of consumers will not order if they have to pay the return costs themselves.
2. An easy return process: returns can be a lot of hassle, so you want to make it as easy as possible for the customer. Therefore, make sure there are enough return options. Although the majority (43%) would like to drop off a return at a parcel point, 31% would like to see the return picked up at home.
3. An extended return period: although UK law sets 14 days as the minimum period for returning an online purchase, 42 percent of consumers would not buy from an online store if the return period is less than 30 days. One quarter (24%) would not even order if the return period is less than 60 days. Even though it may sound contradictory, surprisingly a longer return period leads to less returns as consumers get attached to their goods.
4. A quick refund: UK consumers are willing to wait a maximum of 6 days to receive a refund for their returned products – much shorter than the legal period of 14 days. A timely refund stimulates repeat purchases and boosts customer satisfaction.