The future of returns is personalized. For example, it may not be cost-effective for a retailer to offer all customers free return shipping for all purchases. Rather, retailers need to tailor their return solution depending on the customer, in order to drive incremental revenue, deepen customer loyalty, and save on the costs of returns.
For a prime example of a customized return policy, look no further than DSW. The designer and name-brand shoe retailer offers a membership-based, tiered return policy. This allows the retailer to offer above-and-beyond experiences for loyal customers without breaking the bank.
The tiered membership program has positively impacted DSW’s bottom line. “We believe returns should be personalized. We’ve tailored our return policies to our loyalty tiers, rewarding VIPs while building trust with new customers,” said Karime Benaissa, Chief Digital Officer of DSW. “This has increased customer satisfaction and has positively impacted our business operations.”
The rewards program has four tiers: non-members, DSW VIP Club, DSW VIP Gold, and DSW VIP Elite. Customers can enroll in the VIP program for free. Once enrolled, they’ll earn a point for every dollar spent on eligible purchases and are eligible for free shipping (four to seven day delivery). Plus, they’ll receive a $5.00 credit on their birthday if they’ve spent just one dollar that year.
Once you spend $200 within a calendar year, you’re moved to the VIP Gold tier. Besides receiving a point per dollar, you can pick two days a year where you earn double points.
Spend $500 in a calendar year and you achieve VIP Elite status, earning two points for every dollar spent—with one day annually of your choice where you earn triple points. You’re eligible for free two-day shipping and will receive $10 in store credits on your birthday.
Here’s how DSW’s best-in-class return policy stacks up against the industry benchmarks established in our recent Returns Benchmarks Report.
DSW’s return window is exceptional. For all customers, they offer 90 days to return an item—significantly longer than the industry standard of 30 days. What’s more, VIP Elite customers can submit a return up to a year after the purchase.
The shoe retailer offers convenient options for returning an item. Customers can either take a return to their nearest DSW location or mail it, dropping it off at the nearest FedEx drop-off location.
When it comes to how customers can start or request a return, DSW follows industry best practices. They use a branded online returns portal, easily accessible from their customer service page.
To get to DSW’s return policy, a website visitor must click Customer Service in the footer navigation. From there, Shipping & Returns is the top FAQ item on that page.
The refund process for DSW is straightforward and customer friendly. They’ll process the return within 7-10 business days and refund via the original form of payment.
DSW leverages its tiered, VIP return policy to navigate the tricky waters of return shipping fees. If you qualify for the highest VIP tiers (VIP Gold and VIP Elite), you will not have to pay for return shipping. If you fall within the lower two tiers, you’ll be charged $8.50 for return shipping.
With 86% of flat-rate return shipping fees less than $10, DSW’s fee is reasonable.
We expect that policies of the future will continue becoming more segmented and customized to fit core buyer personas as retailers look at brand aspirers differently than loyal customers and VIPs—and then tailor their return and exchange policies accordingly.
Finally, we expect savvy retailers to keep leveraging the value of returns given its importance as what is often the last touchpoint in a customer’s journey. Forward-thinking retailers will focus on the importance of strategic returns management in measuring net promoter scores, building customer loyalty, and more.