Free returns or no free returns: which should your business offer?

You’ve had a busy month and sold a lot of products online. You’re making money and starting to plan that holiday you’ve always dreamed of going on. Life is good.

However suddenly, a flood of emails starts to come in. Customers are returning their products left, right, and centre. That dream of lying by a pool sipping a fruity cocktail is slowly fading away….

It’s always frustrating when customers return their products. Not only does it mean additional paperwork at your end, but extra costs too.

Many businesses are taking matters into their own hands by charging customers for returns. H&M recently announced it was charging customers ￡1.99 to return items. In fact, a quarter of online retailers now charge shoppers to return items, and this figure is increasing year-on-year.

Is this the right option for your brand though? Let’s look at the pros and cons of charging for returns.

But first…

Is it legal to charge customers for returns?

It depends on why they’re returning them.

In the UK, customers have a right to return faulty or not-as-described goods within 30 days of purchase. In this situation, you’re not allowed to charge customers to make a return.

Brick-and-mortar stores don’t have to accept returns if a customer has just changed their mind, although most will as a gesture of goodwill. However, if a customer has bought online, they have the right to return goods within 14 days.

Online stores have the right to charge customers for returns if they’ve just changed their mind. This charge must be ‘reasonable’ and clearly stated in a store’s terms and conditions.

Bear in mind that legislation is different worldwide and applies to where the customer is based rather than where a store is based. This is something to bear in mind if you operate internationally.

The case for free returns

It inspires customer loyalty

The primary case for free returns is that it keeps shoppers happy. Over 60% of shoppers say that paying to return a product isn’t fair, while 72% say they’d only buy from sites offering free returns.

As the eCommerce marketplace is more competitive than ever, it’s vital to nurture customers and ensure they stay loyal to your business. With free returns being a priority for so many, it’s an easy way to keep them coming back to your store.

According to Klarna, customers who regularly return goods are more loyal to businesses and spend more than the average shopper.

The case for no free returns

It helps you save money

Returns cost businesses about two-thirds of the original item’s price. With many products returned in an unusable state, this means you lose money as a business.

Implementing a returns charge doesn’t just mean you can claim money back, but encourage customers to think about whether a return is worth the cost.

It makes you a more sustainable business

While customers value free returns, they also value companies that are sustainable.

66% of shoppers seek out sustainable brands, with 55% advising that they would pay more for eco-friendly products.

One out of every four returns can’t be resold, meaning they go to landfill. Charging for returns reduces the chances of this happening and significantly lowers your carbon footprint.

How to keep everyone happy

As eCommerce retailers, we’re in a bit of an ethical predicament. It’s clear to see that customers love free returns, but they’re just no good for the environment.

So, what can you do to stay sustainable and keep customers sweet?

Offer detailed product descriptions and high-quality images

The two top reasons customers return clothing are that it’s the wrong size/fit, or that the quality is not what they expected.

This means the more information you give customers before buying, the less likely they will buy in error. Accurate sizing charts, great product photos from all angles, and detailed descriptions will reduce the risk of customers buying something that’s not right for them.

Opening up customer reviews helps significantly too. Not only does this allow previous shoppers to give their thoughts on sizing, fabric, and usability, but by being more transparent, you’re encouraging more sales. It’s a win-win!

Implement cross-selling

When you have many products on your website, it can be challenging for customers to choose the right one for their needs. This can lead to them buying the wrong item and subsequently having to return it.

Cross-selling can be a fantastic way to introduce customers to alternative products that might be better suited to them. Plus, personalisation means customers spend more and stay loyal to your brand for longer!

Offer a modified returns model

When buying online, customers like having the option to choose. For example, expedited delivery, free delivery, collection in-store. Why not give them the same option when returning their goods?

Let’s say you operate online but also have brick-and-mortar stores. By encouraging customers to return products in-store for free, you’re reducing the need for packaging and shipping. This means customers save money, and you can reduce the environmental impact of returns.

In fact, many customers prefer returning products in-store as it’s easier and more convenient. No having to print off labels, wait in line at the post office, or stay in to wait for a courier.

(Bear in mind though that you may need to make ‘reasonable adjustments’ for disabled customers who can’t easily travel to a store to make a return.)

If you operate a loyalty programme, you can offer free returns as an incentive to join. For example, while H&M charges for returns, it waives the fee if you’re a H&M Member. While you may take a slight hit financially, the data and insight you receive will be highly profitable in the long term.

In conclusion

According to Invesp, one in three products sold online are returned. No matter how smooth your sales processes and how detailed your product pages are, customers will always want to send things back.

Is charging for returns right for your eCommerce business? It’s hard to say. You need to take the products you sell, your competitors, and your target audience into consideration.

If you’re still not sure, I recommend speaking to your customers and asking them what they think. If they love your products and the customer experience you provide, they may be more than happy to pay to return their purchases.