Consumer Behavior

Consumers willing to pay item return cost for convenience factor

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November 1, 2022

A good number, 25%, of consumers are willing to pay for a product return in exchange for convenience.

That's a top finding of a Narvar Research report that revealed an increasing demand for at-home pickup and third-party drop off when it comes to product returns.

At this point less than half of retailers are charging for return shipping or restocking costs which means there is an opportunity to make customers happier by providing more choice when it comes to returns, according to a press release on the sixth annual State of Returns report.

In 2021, the value of items returned hit $761 billion, up 78% from 2020. Narvar's research found 96% of customers would buy again from a business that provides a "very easy" or "easy" return policy.

"Our research shows that shoppers are undoubtedly benefiting from retailers' generous return policies," Amit Sharma, Narvar CEO, said in the release. "Return windows are getting longer, refunds are happening faster, and technology is making returns easier than ever before — boosting customer satisfaction. There is a significant opportunity here for retailers to increase loyalty and retain revenue by offering differentiated and personalized return policies that meet different customers' needs."

Additional findings include:

• 26% said they had returned more than four items in the last six months, with apparel and footwear accounting for 46% of recent returns.
• 37% returned their most recent online purchase by dropping it off at a third-party location (e.g., a UPS store). Third-party drop-off adoption has grown steadily for four years now, from 11% in 2019 to 19% in 2022, reflecting shopper demand for a wider range of convenient return methods.
• 63% asked for a refund when making their most recent return with a non-Amazon retailer. That suggests retailers have a significant opportunity to impact the bottom line by converting these refund requests into exchanges, even if they are for items of different value.
• When asked to identify what makes a VIP/loyalty program great, respondents cited instant refunds (77%) and home pickup (76%) as the top benefits. However, many customers will happily accept store credit if it's delivered instantly or if it provides additional value (such as an extra 10% of the refund amount to spend in-store).
• For the sixth year in a row, "fit and size" was survey respondents' top reason for returns (45%) among both first-time shoppers (22%) and loyalists (78%). The trend indicates that retailers have yet to maximize their AR and fit technology investments or unlock the full value of the sizing data customers are providing.

Narvar conducted an online survey in July and polled 2,023 consumers ages 18–65 who had returned at least one online purchase in the last six months.