According to the Wall Street Journal, Amazon is getting tough on their returns policy. It has been reported that they have been banning shoppers for, ‘infractions such as returning too many items, sometimes without telling them what they did wrong’.
Amazon’s lax returns policy has rebounded on other retailers as shoppers have come to expect the same from them. In response some, such as Nordstrom said they were revamping their no receipt necessary and Ikea announced they were looking at their policy of a year’s grace on returned goods.
Across social media Amazon consumers have said they’ve found their accounts closed down without a reason, other than the exercise of ‘sole discretion’ over who gets to buy and who doesn’t.
One Israeli-based Amazon customer found that their account had been closed and he’d been forbidden from opening a new one due, Amazon said, to the violation of their use and conditions terms. After some discussion his account was reinstated.
We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our services over an extended period of time.
We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience of all our customers.- Amazon Spokesperson: Amazon Inc
Overall eCommerce has a high 20% returns rate compared to 9% for red-brick retailers. And during holiday periods this can increase to as much as half of items bought being returned.
Returns are extremely expensive for retailers. It can represent lost sales, damaged or opened inventory and extra staff time. But for online retailers there is the additional problem of the canny consumer.
One such tactic has seen consumers purchasing multiple sizes of a product with the intention of returning those that don’t fit. According to figures from omnichannel retail management firm, Brightpearl, more than 40% of retailers have seen an increase in these ‘intentional returns’.
Amazon along with others have tried to counter this with their try-before-you-buy (TBYB) option but 70% of retailers still expect their margins to be squeezed as consumer tactics will continue to impact on them adversely.
The problem, say Brightpearl, is the use of algorithms to analyse customers’ return patterns. Instead, they say, retailers should use data to identify serial returnees to get a clearer understanding of the true cost of returns and not to penalise all customers.
That’s the only way to know whether a TBYB model will increase and whether it’s a sustainable option. Businesses can then look to ways to recover margin, for example, charging for delivery or returns, as an increasing number of US retailers are now doing.
However, 9 out of 10 consumers want free returns, so the onus really should be finding a solution that allows retailer to capitalise on this trend without punishing or limiting consumers.- Derek Carroll: CEO, Brightpearl
That solution must see retailers, Brightpearl say, manage their returns alongside their customer retention strategies. Not getting it right could hurt brands and impede opportunities to make the next sale.
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