‘Serial returners’ rack up £7bn a year in refunds

UK shoppers are returning £7 billion of purchases every year, according to Barclaycard, leading to a ‘phantom economy’ of lost revenue for retailers.

The study found that a quarter of retailers have seen a rise in returns in-store and online over the last two years, with the number of returned items up by 22 per cent on average. The figures are higher among fashion, footwear and accessory retailers, with 37 per cent of these businesses reporting a rise in refunds since 2016.

Consumers in the study spend an average of £313 on online clothes shopping each year, but return £146 of that (47 per cent). A third of surveyed consumers even said they buy clothes online expecting that items will be unsuitable before they have tried them on.

In order to minimise returns, 36 per cent of shoppers are calling for brands to improve online size guidelines – with 35 per cent seeking the standardisation of sizing across retailers. A further 16 per cent would also like to see wider use of technology online, such as augmented reality, to help them visualise how products will look when worn.

In addition to the potential revenue lost through the ‘phantom economy’, the majority of online retailers (55 per cent) also offer free returns which can come at a cost to their bottom line. Given that seven in 10 consumers now expect free returns as standard, it is increasingly important for retailers to offer solutions that reduce the volume of returns they receive, according to Barclaycard.

However, many retailers see offering free returns as key to their customer experience, with 41 per cent considering free returns as one of their business’ strongest selling points. A further 37 per cent say providing free returns has led to increased customer satisfaction and 44 per cent said they feel they need to offer this service to keep up with the competition.

“It’s clear having an effective and convenient returns policy that satisfies customer needs is a crucial factor of success for retailers,” noted Konrad Kelling, managing director of customer solutions at Barclaycard. “While many have adopted new processes to help manage increasing returns volumes, the real focus should be on measures which help to reduce over-ordering in the first place.

“Implementing technology such as virtual fitting rooms which allow shoppers to visualise how products will look when worn, for example, is one way retailers could reduce the number of returns and refunds they contend with, and in turn, the size of the ‘phantom economy’,” Kelling added.

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