PrettyLittleThing (PLT), the popular online fashion retailer, is facing significant backlash from consumers after announcing the end of its free returns policy. The decision has sparked a wave of criticism on social media, with many customers expressing their frustration and disappointment. This move comes as part of a broader trend among e-commerce retailers to mitigate the high costs associated with handling returns.
PLT is not alone in this shift. Many major retailers have introduced fees for product returns in recent years. Fast fashion giant H&M began charging customers £1.99 ($2.40) for online returns in late September. Similarly, Zara charges £1.95 for returns via mail, while American Eagle, JCPenney, Saks Fifth Avenue, and TJ Maxx in the US charge $7, $8, $9.95, and $10.99 respectively. Even the $100bn fast fashion brand SHEIN has added return fees, though it still offers free returns for the first purchase.
Handling product returns, known as 'reverse logistics,' is a costly and complex process for retailers. It involves shipping the item back to the warehouse, inspecting and repackaging it, and potentially refurbishing it for resale. According to data from Narvar, the average cost for processing a return is approximately $33 per item, which includes postage, packaging, depreciation, labor, and missed sales opportunities. With roughly 17% of online purchases being returned in 2022, the financial burden on retailers is substantial.
Improve product descriptions and visuals: Providing detailed product descriptions, high-quality images, and videos can help customers make more informed decisions, reducing the likelihood of returns.
Ensure the sizing chart is consistent across all products: This way, if a customer purchases a top in size 4, they can confidently expect all other products labeled size 4 to fit them just as well.
Encourage customer reviews and FAQs: Leveraging customer reviews and a robust FAQ section can address potential buyer concerns and questions upfront, thereby decreasing the chances of returns.
Implement size recommendation tools: Tools that recommend the best size based on previous purchases and customer measurements can minimize returns due to sizing issues.
Cross-selling during the return process: As research indicates, offering cross-selling opportunities during the return process can utilize the refund effect, where consumers are more likely to spend refunded money on new purchases. This can turn potential revenue loss into new sales.
Flexible exchange policies: Encouraging exchanges instead of returns by offering incentives can help retain revenue and satisfy customers' needs.
By adopting these strategies, retailers can not only reduce the financial impact of returns but also enhance customer satisfaction and loyalty.
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