Free returns makes customers more loyal

Retailers who don’t offer an easy and free returns process are losing sales and customer loyalty, states new research from Klarna, which notes that 86 percent of shoppers said that free returns will make them more loyal and encourage repeat visits.

The research conducted in early 2019 by Censuswide is based on responses from over 2,000 consumers and found that 84 percent of British shoppers stated that they won’t shop again with a brand if they have a poor returns experience, while 78 percent of British shoppers added that they will buy more in the long-run if a retailer has free returns and three quarters (75 percent) said that easy returns are an essential factor in their choice of retailer.

The majority of consumers (82 percent) say returns are now a normal part of online shopping, and with online sales hitting a high of 20 percent of all retail sales in December 2018, according to the Office for National Statistics, this growth in returns can’t be ignored, added Klarna, Europe’s leading payments provider and a newly-licensed bank.

Luke Griffiths, UK general manager at Klarna, said in a statement: “It’s no secret that for retailers, returns can be difficult to manage and there is a common misconception that they’re bad for business. But retailers who aren’t prioritising their returns processes are damaging their business - losing sales, and eroding customer loyalty.

“By embracing returns as a competitive differentiator, online retailers can stand out from the crowd with “pay after delivery’ - allowing their customers to turn their sitting room into a fitting room. Over a quarter of respondents (26 percent) said this would make them trust a retailer more and 63 percent said it would encourage them to keep more items, helping build a relationship with customers and secure long-term loyalty.”

The research also added that the volume of online items being returned has climbed 14 percent in two years and this rise is being exacerbated by a growing gap between what customers see online and the reality of what they receive in real life. Nearly a third of shoppers (27 percent) return items because the fit isn’t right and returning items because the product looks different online than in reality has more than doubled since 2017, from 8 percent to 19 percent.

The findings Klarna indicates means that if retailers want to reduce their online returns, they should look to improve their online product representation, as 81 percent of shoppers added that better photos and descriptions would help reduce the ‘false expectations effect’ and consequently the amount they return.