Business

Serial Returners Hitting Ecommerce Profits

Returns are piling up at small online retailers, costing them time and money, says new research.

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Returns are piling up at small online retailers, costing them time and money, says new research.

Business

Serial Returners Hitting Ecommerce Profits

Returns are piling up at small online retailers, costing them time and money, says new research.

Share this article

Ecommerce businesses are coming under pressure because consumers demand free and easy returns on items they order but don’t want to keep.

Serial returners are people who buy online but only hang on to a fraction of the items they purchase. Free returns represent a cost to the businesses that offer them.

New research by Barclays shows that the rate of returns is spiraling and that almost a third of smaller ecommerce businesses are struggling with the returns process, which is impacting on profit margins.

It comes as online shopping continues its relentless growth, with sales rising more than 14% last year alone, compared to just 1.1% for in-store purchases.

It is estimated that three in 10 shoppers regularly over-order and return unwanted products, with one in five selecting multiple versions of the same item and making up their minds about which ones to keep later.

“Today’s time-pressed shopper expects the process to be fast, easy and free – and that applies to both buying goods as well as returning them,” said Sharon Manikon at Barclaycard Global Payment Acceptance.

“Faced with more choice than ever before, alongside a range of different clothing and shoe sizes, it’s hardly surprising that this new breed of online shopper – the serial returner – is starting to emerge.”

The dilemma for small retailers is that they must offer favourable returns in order to attract new customers, but have to deal with the cost of couriering, processing and storing items when they come back.

According to the research, more than half of small and medium-sized retailers said dealing with returns has a negative impact on the day-to-day running of the business.

A third offer free returns but offset the cost by charging for delivery, while one in five increase the price of items.

Serial returners questioned for the research said they would send less stuff back if brands standardised clothing and shoe sizes.

“Online spending will continue to rise and the need to keep pace with customer demands presents a dilemma for the UK’s SMEs, who need to protect their bottom line, but also compete with the larger players on the high street,” said Manikon.

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Serial Returners Hitting Ecommerce Profits

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