Returns Cost Retailers More Than They Should

According to a study from the National Retail Federation, nearly 11% of online returns (worth an estimated $23 billion dollars) are fraudulent.

What's more shocking?—It's often a retailer's best customers who are contributing to this loss by gaming return policies. In fact, 65% of consumers admit to taking advantage of retailer return rules.

From lying about return reasons to wardrobing (e.g., buying a dress for a party, wearing it, and then returning it after the event), these small but frequent abuses of return policies erode fragile margins for retailers.

Why do consumers bend return rules?

Put plainly, most shoppers bend the rules when it comes to returns out of laziness. In other words, many retailer return policies are so relaxed that shoppers aren’t motivated to do the right thing, whether that’s staying inside the return window or accurately disclosing their reason for return.

A smaller subset of consumers are more malicious in their return policy abuse. These shoppers will return ineligible items, return items bought at a discount without the receipt to get a refund for the full price, return products but keep the “gift with purchase”, and more.

How do consumers justify their rule-bending behavior?

Returns cost retailers a lot—here's how shoppers justify it.

Numbers you should know about return policy abuse

40%

If it weren’t such a hassle, 40% of consumers say they’d “do the right thing” when it comes to returns.

26.1%

That’s the number of rule benders who will click whatever return reason is necessary to obtain free shipping.

24.9%

Nearly 1 out of 4 rule benders will return a purchase without a receipt by falsely claiming the item “was a gift.”

15%

That’s the number of return policy rule breakers who will ship back ineligible items (e.g., final sale, outside return window, etc.) to the retailer.

20.8%

Nearly 21% of rule bending customers will abuse “instant refund” policies to obtain refunds on illegible returns.

14.4%

Of rule benders return items bought on sale or at a discount without the receipt in the hopes of obtaining a higher refund.

The good news?—Most rule-bending behavior is preventable

As a matter of fact, more than 80% of it can be stopped before it starts.

Almost all shoppers agree the following basic measures would dissuade them from abusing retailers return policies:

Providing an easy way to report extra items included in a delivery
Offering more convenient return options (e.g., home pickup, boxless/printerless returns, and nearby drop off locations)
Requiring an account login or order number to process the return
Allowing shoppers to process returns online
Requiring photographic proof of damage