Returns are a Pain in the Profit!

Is this the future of returns management?

The Fashion Network had the opportunity to speak to Lloyd Hester of ProtectaTag, who have come up with what could be the future of returns management, the ProtectaTag product uses a high quality and highly visible ribbon which is fitted to the garment during the manufacturing process or at the point of sale. The ribbon is threaded through the garment and fixed using a non-removable lock button. It is a non-intrusive way for the customer to try on the garment whilst keeping the ribbon highly visible. Having the ribbon present prevents the customer from wearing the item out and then attempting to return.

With returns costing UK the industry around ￡60 billion a year according to Clear Returns, it comes as no surprise that an added tool, like ProtectaTag, has taking the industry by storm. Lloyd Hester of ProtectaTag touched on how companies they’d spoken to were having returns volumes in excess of 50% of purchases. The majority of returns consisting of products that are aimed at the younger consumer. It appears that an increasing number of customers are prepared to buy a multiple item, wear them out over a weekend then return them in the pre-paid postage bags a few days after, incurring costs to the retailer in the process.

Serial returning is an act that customers probably see as victimless. However, Lloyd was able to give details of the ‘hidden’ costs and how they can affect the overall margin on products and, potentially, cause the overall cost to the consumer to be higher. Costs associated with return packaging and postage, along with the additional warehousing costs including the space and staffing costs required to sort, process and restock items can have a real impact on the bottom line. Plus there are further factors that can impact the overall margin on particular lines including the price reductions required to shift returned stock, increased stock levels required to accommodate higher sales volumes (some of which will be returned) and the impact on lost sales due to low stocks while products are in the possession of the ‘serial returners’.

House of CB are one such company that has been using ProtectaTag in an attempt to improve the impact of returns. The retailer has seen a big impact from using ProtectaTag, with online returns reduced by upwards of 60% since it was introduced.

ProtectaTag is just one way that retailers are attempting to disrupt serial returners’ habits. Another approach taken by some companies is to monitor customer purchase and returns behaviour. Retailers are able to identify the customers that are abusing returns policies and inform the customer that their behaviour has been identified and is being monitored with the possibility of having their account suspended if the activity continues.

Want to learn more about returns management? Then why not attend our 2019 Fashion eCommerce Summit and listen to our panel called Returns, Returns, Returns. 

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