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A Breakdown Of The Return Rates In The Retail Industry

While the retail industry continues to see some of its best years both in-store and e-commerce retailers will always have to deal with returns. Retailers understand that most often it will be customers making a purchasing error. That being said, retailers themselves are sometimes guilty for sending customers the wrong order. The same can be said for the shipping company responsible for making sure the customer’s order is received by them. Mistakes happen, and they often result in returns. Unfortunately, retailers dealing with too many returns are left to pay operational costs to resolve the issue, while also suffering from a decrease in trust from the customer. With the help of this post and featured infographic, retailers should be better equipped for reducing their losses as a result of returns.

Of the most common reasons for a return, customers are most likely to return a product that doesn’t match the description or image offered online. Receiving an item that does not live up to what was described or pictured is grounds for a return and every retailer understands that. However, in order to avoid these excess returns, retailers should edit any disingenuous descriptions or pictures on the product page. When photos of a product are non-enhanced, customers are better able to understand the product they’ll receive. This is particularly true of sizing, as mis-sized products contribute to upwards of 52% of total returns.

While it may seem as though retailers are hurting their own profits by offering free returns, the opposite is actually true. For some context, free shipping and free returns are massively influential, with research supporting the claim that 96% of shoppers consider free shipping the most influential on their willingness to purchase, with 79% of shoppers saying free returns are more important. Retailers may have to deal with some customers taking advantage of these return policies, but anytime a customer purchases a product assuming they’ll return, but end up keeping it, retailers greatly benefit.

That being said, as mentioned previously, with the rate of online shopping increasing, the rate of returns is also simultaneously increasing. According to reports, returns have seen a 70% year-over-year increase in 2020. This return issue is only made worse when customers attempt to scam retailers through techniques such as wardrobing and bracketing. When customers use these scams, they often order every variation of a product to briefly use and then return it as though it were new and never worn. To avoid having to spend additional capital to solve these issues, organizations must be properly defended against these types of attacks, in addition to fraudulent attempts of money laundering.

How can retailers protect themselves against fraudulent purchases, though? Through the help of third-party anti-fraud tools, any retailer is capable of identifying a stolen card the moment its swiped. When discovered, retailers can block every transaction from the stolen cards and offer full refunds to the original card holder. This is only one of the methods that these providers offer retailers to reduce the cost of returns on their business.

Rather than allowing your customers to take advantage of you, consider the ways in which the defense tools offered by these security organizations can help your business. For more information on the types of services offered, in addition to the ways these anti-fraud tools can help save more money, please take a minute to read the infographic accompanying this post in full. Inofographic courtesy of Signature Payments.