Returns Policies – The Long and the Short of it

When it comes to fashion, return windows seem to have become never-ending as a result of the pandemic and Brexit. Over the last two years experts were recommending that retailers extend their returns policy to offset the lockdown-inspired uncertainty and challenges that have arisen from Brexit. 

At the time, this advice provided retailers and carrier services with much needed breathing space. However, now the worst of covid is hopefully behind us, is it still wise to offer this policy? Here, Al Gerrie, CEO at ZigZag Global (pictured left), unpacks returns to help you better understand the long and the short of the returns window discussion. 

What are the obligations for retailers?

Regardless of what retailers offer on their website, there are consumer rights regulations in place to protect the consumer and provide a minimum returns window.  

All consumers can cancel an order and expect a full refund within 14 days from when they receive the goods. They just need to notify the retailer of their intent to return and do so within two weeks. For faulty goods, the law is similar, and allows consumers 30 days to return for a full refund. 

Retailers are bound to honour these regulations by law. So, it is essential that the consumer rights are advertised on a retail website as a bare minimum. Returns are quickly becoming the most important aspect of customer experience. Savvy consumers will check the returns policy before purchasing, so not having one is eCommerce suicide. 

The benefits of offering a short returns window

Getting goods back on the shelves quickly is the ultimate goal for retailers. So having a short return window is appealing to many. This rings especially true when it comes to the fast fashion brands that revolve around maintaining low production costs, high volume sales and shorter seasons. 

The fast fashionista can look out of trend in a matter of weeks. For these sorts of brands a shorter returns window means goods can be returned pronto and resold at the highest possible price. 

It also allows retailers to better manage their stock. The sooner they know the product’s return date, the sooner the information can be relayed down the supply chain and more informed decisions can be made.

Shorter return windows also protect retailers from fraudsters who engage in “wardrobing”. This ‘process’ costs UK retailers £1.5bn per year, and is both morally and environmentally questionable. Whilst a data-analytics-driven platform such as ZigZag’s returns management solution is the best way of identifying serial returners, the next best solution is to reduce the returns window. Often the “wardrober” will pick out an outfit for a specific event with the intention of returning straight after. A shorter returns window will limit these deviant consumers’ chances of this happening. 

The benefits of a mid-range, 30-60 day returns window

Our Global’s Retail Returns Report shows that 79% of consumers check the returns policy before purchasing. When coupled with Invesprco’s study that estimated 92% people will shop again with that retailer if returns are easy, it demonstrates the importance of a saucy returns policy. 

The best place to start when deciding your returns policy is to look at the key competitors and what they are offering consumers. Even policies from retailers that are in different vertical markets can be useful. For example, if your competition is offering a short returns window, the 30-60-day option would work as a differentiator and can be marketed against. 

The minimum legal return period is just 14 days. For salaried employees, this might not span over a single paycheck. It is estimated that 50% of Britons and 64% of Americans are living paycheck to paycheck. A longer returns window will put consumers’ minds at ease, and give much needed justification for buying items that they are on the fence about.

The benefits of a longer 60+ day returns window

Championing a generously long return window can make you stand out from the crowd. It shows customer’s that you value their satisfaction. Wunderman’s “Wantedness” study found that 79% of consumers want to feel like brands understand and care about them, before they are going to consider purchasing an item. With ecommerce and retail brands in a constant war with one another, the simple act of elongating the returns window is a simple but effective way to stand out. It is definitely a good starting place for a company trying to put its customer first.

Increasing the returns window is a sure fire way to eliminate the popular “where’s my refund” and “where’s my return” enquiries. One of our partners reduced customer enquiries by 40% after switching to their returns management solution. Customers started receiving their refunds faster and had full visibility on the returns journey. 

This, coupled with a recent study from the University of Texas which found that a generous returns window actually makes returns less likely, undoubtedly reduces the stress put on customers. With less panic for the customer and fewer customer service complaints for the retailer, what is not to like?

Extending the returns window around peak season is considered best practice amongst leading retailers and is an easy way to retain customers. Retailers like M&S, John Lewis and TK Maxx gave consumers over three months to make a return and Primark almost four months. This reduces the workload on warehouse operations and overall logistics network, whilst forgoing the delays to customers that accompany large return spikes over the peak months. 

Whilst it might be wise to leave some room in a returns window throughout the year so that the retailer can increase it for Christmas, it could also be looked at favourably if the retailer offered it year-round.

So, what’s the perfect length for a returns policy?

Ultimately, the perfect return window length comes down to the needs of each individual retailer. But it is undoubtedly worth trialling and testing to find the sweet spot. It is also always beneficial to survey your shoppers in each market or talk to your best customers directly to see what improvements they think you should make.

According to our recent research, 95% of returns are made within 7 days anyway. Whilst it is widely accepted that a more generous returns policy encourages shoppers to make a purchase, this crucially does not lead to more returns. 

Despite this, I would suggest using a longer returns period. It encourages spending more than additional returning, eases the burden on customer services and increases customer loyalty. It also gives you a distinct edge and keeps you competitive in an ever-changing market. A returns management system with an exchanges function will combat the drawbacks of getting goods back on the shelves faster and managing stock efficiently.