How to build a customer-centric returns policy
Retailers are used to focusing on customer expectations when it comes to their products and services. Our data suggests that returns have a growing influence on consumer purchasing behaviour and retailers need to continue listening to their customers or risk losing them. There is clear evidence that retailers are meeting some returns policy expectations, but more can still be done to create a perfectly customer-centric experience.
The ideal solution will be slightly different for every individual, with different groups of customers having varying preferences. However, our survey reveals common themes on the customer returns wish list.
Communication & tracking
Our study shows that buyers are becoming more demanding about communication during returns. In ZigZag’s 2021 study, 65% of consumers were happy with the level of communication they got with their returns. A year later in 2022, only 59% agree retailers communicate enough with them after making a return.
Whether this is down to a genuine drop in communication from brands or indicative of consumers becoming more discerning remains to be seen. But certainly, post-pandemic buyers are becoming more demanding when it comes to returns.
In our 2021 study, only 63% had monitored the progress of their return through a tracking service. In 2022, 83% of people do so, demonstrating that returners are more vigilant.
This is likely to be in response to the increased offering of tracking services from delivery providers, in particular, fast food delivery apps that offer up-to-the-minute order tracking. Monitoring deliveries has become a more practiced behaviour amongst consumers that have become more invested in knowing exactly where their purchases, and returns, are.
Methods of communication
As expected, email updates are still king. Preferences for how people want to communicate during the returns process remain essentially unchanged from last year, with 79% preferring email as their main communication channel – a choice that remains consistent across all ages and sex.
A growing number of shoppers also want to be informed by SMS text message. 37% of people like to be informed via SMS with young people unsurprisingly being more likely to choose it than older consumers. Customers are increasingly requesting SMS updates for both orders and returns. SMS updates keep customers informed in real time and result in fewer missed deliveries and collection slots. More retailers than ever switched SMS updates on for 2021’s peak season.
However, interestingly, getting a message through WhatsApp was far less popular at 10%. Even though at surface level it does not seem too different to the popular, by comparison, SMS message. WhatsApp is perhaps seen to be reserved for personal use by consumers and SMS more business.
Finally the least popular method of communication was being forced to use a retailer’s app to check on updates. At 9%, consumers do not want the hassle of downloading another new app and creating or signing into an account.
Second only to free returns is speed. A fast refund is the next most crucial factor for online shoppers, with 63% of people believing it is a key component of a good returns policy for online shopping.
84% of consumers expect a refund within seven days, while 26–35-year-olds are especially thirsty for an instant refund with 10% expecting to have their bank account topped up immediately.
This poses a challenge for many retailers. A customer may feel that an item is returned the moment it leaves their possession, but for the retailer it is a little bit more complex. There must be a balance between keeping consumers happy and the retailer protecting itself from loss.
Gift cards and extra credit
Gift cards offer an unrivalled opportunity to keep cash in the business for retailers. By offering to refund through a digital gift card, retailers minimise the financial impact of returns and encourage repeat sales. They are also becoming increasingly popular, especially around the holiday season.
Our research showed that 58% of UK consumers would like the option of having the value of their refund returned to a retailer’s digital gift card for them to spend in the future. This is a particularly attractive option in the gift-giving season, with people interested in recycling that money for gifts elsewhere.
30% of consumers were particularly interested in a gift card option if it meant an instant refund. This was more popular with the younger generations. 43% of those aged between 18 and 35 would like the gift card option so they can quickly go back to shopping.
However, this 30% rises to 51% if, instead of an instant refund, the gift card provides extra credit. So, if a retailer offered its customers additional credit, for example, they return an item worth £20 and receive £22 in credit, they would be more likely to take the gift card option. This method is being used by some retailers to incentivise customers to have another attempt at getting their order right, thus keeping cash in the business for the brand.
Time to try out: the case for longer return windows
Customers also want a reasonable amount of time to make a decision. 30% of surveyed consumers think that a long return window is an integral part of a returns policy. Despite this, 95% of people surveyed said that they still process and hand back the return within seven days, and 99% will have the return back within 14 days. So that standard 30-day return window is seldom used to begin with.
Therefore, while people want the option to take their time, in reality, returns are still generally handled rapidly, so including a reasonable return window can have a positive reputational effect without seriously impacting the bottom line.
The verdict on a customer-centric approach
Different groups of consumers will have different preferences, so retailers may benefit from conducting surveys and keeping a close eye on customer feedback forms. However, our data suggests customers’ prize speed and convenience in the refunds process. Clear communication and transparency will also mollify any customers who may already be frustrated at having received a product which did not meet their expectations. As the returns experience shows, dealing with customers when they are not happy can be extremely important in building closer and more profitable customer relationships.
For more insight into the consumer attitudes and behaviours around the returns experience, download the full report here >>