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EconomyOnline & Digital

‘Serial returners’ cost retailers £7bn a year

New research from Barclaycard has revealed that retail returns made by British shoppers amount to a loss of £7bn a year for retailers.

Some 47% of clothing goods purchased are returned by consumers – while they spend on average £313 on online clothes shopping each year, they end up sending back £146 worth.

Over a quarter (26%) of retailers have seen a rise in returns in-store and online over the last two years, with the number of returned items up by 22% on average. The figures are higher among fashion, footwear and accessory retailers, with 37% of these businesses reporting that refunds have risen since 2016.

Clothes shopping online is fuelling the rise of the ‘serial returner’, as almost half of the amount consumers spend ends up being refunded by retailers. Some 33% of shoppers buy clothes online expecting that items will be unsuitable before they’ve even tried them on. Size variation is a major factor as 40% of consumers said they returned clothes bought online as it didn’t fit as they expected it to.

To combat the issue of inconsistent sizing, 9% of shoppers have taken to buying multiple sizes of the same item and returning those that don’t fit – a trend that 27% of retailers said they have noticed.

In order to minimise returns, 36% of shoppers are calling for brands to improve online size guidelines – with 35% seeking the standardisation of sizing across retailers. A further 16% would also like to see wider use of technology online, such as augmented reality, to help them visualise how products will look when worn.

Making a return is also easier, with 52% of respondents thinking that the returns process is more convenient with 29% of merchants saying that it was a direct result of the increase of serial returners. Some 54% of retailers think that customers’ decisions about where to shop are now influenced by the vendor’s returns policy.

Some 55% of retailers also offer free returns which can come at a cost to their bottom line. Given that 69% of consumers expect free returns ‘as standard’, it’s increasingly important for retailers to offer solutions that reduce the volume of returns they receive.

However, 41% of retail businesses consider free returns as one of their business’ strongest selling points. A further 37% say providing free returns has led to increased customer satisfaction and 44% feel they need to offer this service to keep up with the competition.

Konrad Kelling, managing director of customer solutions at Barclaycard, said: “It’s clear having an effective and convenient returns policy that satisfies customer needs is a crucial factor of success for retailers. While many have adopted new processes to help manage increasing returns volumes, the real focus should be on measures which help to reduce over-ordering in the first place.

“Implementing technology such as virtual fitting rooms which allow shoppers to visualise how products will look when worn, for example, is one way retailers could reduce the number of returns and refunds they contend with, and in turn, the size of the ‘phantom economy’.”

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