The costs and consequences of returning our purchases
Many consumers frequently return products, often ordered online, without thinking of the consequences. Consequences such as additional transportation, packaging, processing and, often, the ordered products themselves are incinerated, landfilled, or otherwise dumped. More resources are then consumed to replace the wasted products.
Furthermore, although it often feels free to the consumer, product returns are costly to retailers. In the end, the costs for transportation, packaging, processing, and any replacement order, need to be covered by raising product prices.
Striving to reduce returns rates, some retailers have started to charge (modest) returns fees for online returns. Associate Professor Regina Frei from Surrey Business School, and head of the Product Returns Research Group, recently discussed this development in a BBC Worklife article. She says: “Although the returns fees are far from sufficient for covering the costs of an online return for retailers, they may be sufficient for making consumers think twice about returning their items, or whether they can do it in-store instead, where most returns remain free to consumers.
“To further reduce product returns, retailers should strategically rethink their approach to selling and handling returns”.
The Product Returns Research Group is happy to assist retailers with this challenge. Please get in touch at r.frei@surrey.ac.uk