State of Returns

Roughly 25% of shoppers are willing to pay for added convenience such as scheduled home pickup when returning items, but less than half of retailers currently charge any kind of return shipping or restocking fee. That means retailers have a clear opportunity to make customers happier by providing more choice when it comes to returns, while also getting inventory back in stock more quickly. Those are among the findings of the 6th annual State of Returns consumer survey report from Narvar, the pioneer in post-purchase customer experience, and the company's 2022 Returns Benchmark Report, which analyzes the published return policies of 200 retailers.

In 2021, the value of merchandise returned to retailers hit a massive $761 billion, up 78% from 2020. Although returns are an ongoing operating challenge, they also present retailers with an opportunity to reconnect with customers and cultivate their trust and loyalty by providing a seamless return experience. Narvar's research has found that 96% of customers would buy again from a business that provides a "very easy" or "easy" return policy, suggesting that retailers are wise to expand the range of return methods they offer, personalizing the process to meet the diverse needs of first-time shoppers, off-and-on shoppers and highly loyal VIPs.

"Our research shows that shoppers are undoubtedly benefiting from retailers' generous return policies," said Amit Sharma, CEO of Narvar. "Return windows are getting longer, refunds are happening faster, and technology is making returns easier than ever before—boosting customer satisfaction. There is a significant opportunity here for retailers to increase loyalty and retain revenue by offering differentiated and personalized return policies that meet different customers' needs."

Key Findings

Other key insights from Narvar's research include:

• Returns are ubiquitous and frequent: 26% of shoppers surveyed said they had returned more than four items in the last six months, with apparel and footwear accounting for 46% of recent returns.
• Consumers are increasingly adopting third-party drop-off locations: 37% of shoppers surveyed returned their most recent online purchase by dropping it off at a third-party location (e.g., a UPS store). Third-party drop-off adoption has grown steadily for four years now, from 11% in 2019 to 19% in 2022, reflecting shopper demand for a wider range of convenient return methods.
• The majority of shoppers still request refunds rather than exchanges: 63% of respondents said they asked for a refund when making their most recent return with a non-Amazon retailer. That suggests retailers have a significant opportunity to impact the bottom line by converting these refund requests into exchanges, even if they are for items of different value.
• Instant refunds and home pickup are consumers' favorite loyalty program perks: When asked to identify what makes a VIP/loyalty program great, respondents cited instant refunds (77%) and home pickup (76%) as the top benefits. However, many customers will happily accept store credit if it's delivered instantly or if it provides additional value (such as an extra 10% of the refund amount to spend in-store).
• Poor fit remains the top reason for returns: For the sixth year in a row, "fit and size" was survey respondents' top reason for returns (45%), among both first-time shoppers (22%) and loyalists (78%). The trend indicates that retailers have yet to maximize their AR and fit technology investments or unlock the full value of the sizing data customers are providing.
• Bracketing is here to stay: 63% of shoppers surveyed admitted to bracketing, up from 55% in 2019. A growing number of shoppers (15%) say bracketing is "just how they shop now."

To learn more, read Narvar's 2022 consumer study, The State of Returns: The End of One-Size-Fits-All Returns, and its 2022 Returns Benchmark Report.