Recently, Amazon announced its decision to abolish free returns, a move that marks a significant turning point not only for the American giant, but for the world of e-commerce in general.
This decision reflects a growing trend among online retailers, in contrast with what has happened so far. According to the latest “Returns Insights Report” by iF ReturnsIn fact, the 74% of online stores in Europe now charges consumers for return costs. In this article, we will explore the implications of this choice and how it could influence consumer behavior and the online commerce landscape.
Is the era of free returns coming to an end?
Free returns have long been a mainstay of online commerce, incentivizing purchases and offering consumers additional security. Until recently this service was considered a watershed, without which it was very difficult to succeed in the world of e-commerce.
However, with increasing pressure on profit margins and operating costs, as well as other issues we'll explore later, retailers are reevaluating this policy. Managing returns is in fact an expensive process, both in terms of time and money: iF Returns research shows that customer service teams spend an average of 14 minutes to manually manage a return, a time that is reduced with digitalisation and automation, but which still remains a significant expense item.
Impact on customer behaviors
Returns are often related to issues with the product, such as size or fit. However, the free nature of the process pushes some customers to impulsively purchase multiple variations of the same item and then keep only the favorite one. The ability to return items for free has also encouraged behaviors such as purchasing items intended to be worn only once for events or social media posts.
Behaviors like these have become so commonplace that they even put a giant like Amazon, which was initially among the main promoters of free returns, in difficulty. With the elimination of free returns, we are likely to see a decline in impulse shopping and “double” purchases. Consumers may become more thoughtful in their choices, weighing the cost of potential returns.
However, this policy could also shift consumer preference towards those e-commerce sites that keep returns free. A search for Trustpilot on a sample of 1,000 Italians reveals that 82% of those interviewed say that the return policy influences their purchase choice, and 58% avoids buying from retailers who charge returns.
But in the long run, how many will remain to guarantee this service?
Preferred return methods
A further point that has pushed many online retailers to review their policies for returning merchandise concerns the return methods preferred by users. Home collection is the most popular return method, preferred in 70% cases. It's convenient for customers, but it also sees the highest number of incidents, such as missed pickups, which can worsen the shopping experience for customers and generate additional additional costs for retailers. Alternatives include delivery to a collection point (26%) and return to physical store (4%).
How will the strategies of online retailers change?
Online stores may have to find a balance between reducing costs and maintaining customer satisfaction without free returns, and many are already thinking about alternative solutions. Strategies could include:
- improve product descriptions and size guides to reduce returns related to fit issues;
- invest in technological solutions to automate and optimize returns management;
- offer incentives or discounts to encourage customers to maintain their purchases;
- implement flexible return policies for specific products or repeat customers.
Conclusions
Amazon's decision to eliminate free returns marks a significant shift in e-commerce, which could have broad repercussions for both consumers and retailers. While this move may help reduce operating costs, it could also fundamentally change the online shopping habits, drastically reducing impulsive purchases, made with the idea already in mind of returning them once used.
However, to avoid losing customers, retailers will need to carefully balance the need to contain costs with the desire to provide a positive and competitive customer experience. Meanwhile, consumers may become more selective in their online shopping choices, giving greater weight to returns policies in the decision-making process.
