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The Real Cost of an Exasperating Online Returns Process

by Tom Caporaso  |  
May 14, 2015
  |  1,289 views

Shipping charges are the main driver of abandoned carts, and free shipping has been a proven sales closer since long before the Internet came around. Moreover, from big-box stores to niche merchants, myriad retailers made free delivery a centerpiece of their holiday marketing efforts last year.

Shipping costs aren't the only factor consumers consider when making purchase decisions, though. Retailers' returns policies are now facing greater scrutiny.

Moreover, before shoppers decide to buy items online, they are looking into whether a retailer makes the customer pay return shipping fees and/or allows in-store returns.

Those factors make good business sense from the customers' perspective. Online purchases are inherently riskier than those made in stores, simply because testing, trying on, or even touching something through a computer screen is impossible. Shoppers can't be sure they'll get exactly what they want until an order arrives, which typically occurs several days after they've paid for it.

The Online Returns Process: Time-Consuming and Exasperating


If consumers aren't satisfied with a purchase, the online returns process is much more complicated and time-consuming than just taking an item back to a store.

Even worse, the vast majority of retailers—about 90% as of January 2014, according to an Internet Retailer study of Top 500 retailers—make customers pay for return shipping, either upfront or on the back end, via refund deductions, restocking fees, or charges for "prepaid" shipping labels.

Online shoppers find these returns processes unsatisfying, to say the least. Their discontent with the purchase is heightened by the fact that they'll have to shell out more money just to send it back—a demand they've probably never encountered during their brick-and-mortar transactions. Worse, if customers also paid to have the original order delivered, paying for shipping on the back end will only compound their dissatisfaction with the shopping experience.


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Tom Caporaso is the CEO of Clarus Commerce, a provider of e-commerce and subscription commerce solutions. It powers FreeShipping.com, and it customizes and manages Return Saver, co-developed with FedEx, and 2-Day Shipping by MasterCard.

LinkedIn: Tom Caporaso

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