Hardware Retailing The Industry's Source for Insights and Information
A recent report published by the National Retail Foundation (NRF) and Happy Returns notes the prevalence of returns in the retail industry and cost threats returns pose for retailers.
The report says retailers estimate 16.9% of their annual sales this year will be returned. While this presents cost considerations for retailers, returns aren’t always negative.
“Returns play an important role within the retail ecosystem and offer an additional touchpoint for retailers to provide a positive interaction with their customers,” says Katherine Cullen, NRF vice president of industry and consumer insights. “Retailers recognize the value of returns and their integration with brand loyalty, and many are prioritizing their returns capacity to ensure a seamless customer experience.”
Here are three ways returns and return policies are currently impacting retailers.
Increasing Customer Brand Loyalty
In addition to factors like product offerings, price considerations and shopping experience, consumers also consider return policies when deciding where to shop. According to the NRF study, 76% of customers choose to shop at retailers offering free returns and 67% report a negative return experience would turn them away from shopping with a retailer again.
Discover how retailers can increase loyalty by embracing technology.
Implementing Updated Return Policies
Retailers surveyed for the report understand the importance of having a solid return policy. 68% of respondents are focusing on updating their return policies within the next six months, and improving return experiences for customers and reducing return rates are viewed as top goals for businesses to accomplish in the coming year.
Hear from past NHPA Retail Management Certification Students who share their best practices for managing returns.
Rising Prevalence of Fraudulent Returns
Retailers must also be wary of consumers taking advantage of return policies. 93% of retailers surveyed noted retail fraud as a significant issue for their business. Bracketing, or purchasing items only to return them, has also increased. 51% of Gen Z consumers report engaging in this behavior.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” says David Sobie, co-founder and CEO of Happy Returns. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics. Solutions like no box/no label returns with item verification enable immediate refunds, meeting customer expectations for convenience while increasing accuracy, reducing fraud and helping to protect profitability in a competitive market.”
Learn best practices retailers take to mitigate retail fraud.
