There will be many unhappy returns during and after the holiday season. Unhappy because most of the returned goods will have nothing wrong with them, and manufacturers and retailers are absorbing the costs of processing these no-fault found returns. A few will go back on a retail shelf, a few might go back into the warehouse inventory, but most will enter the world of returns processing and dispositioning. The industry statistics indicate about 95% of the returned goods will find a way to the secondary market and be sold at a discount.

During this holiday season, the volume of returns will be higher than ever. You will read the reasons for the returns increase in some of the stories in this edition of RL Magazine. Reasons include e-commerce sales with higher returns because the products delivered did not meet expectations. Some e-commerce retailers are encouraging the consumer to buy multiple sizes or styles for review at home. Almost every e-commerce company is offering free returns shipping and processing, again for goods that are perfectly fine but may now be considered used or defective after having been opened. Competition has forced policies that are about making returns easier.

The focus of return policies should be about offering a better consumer experience with the product purchased. If most returns are about the product not meeting expectations, which surveys confirm, then manufacturers and retailers should reset expectations. I remember from years of sales and marketing experience the basic business idea to set lower expectations and over-deliver on your performance. That is the best way to increase customer loyalty to your brand, whether you are a manufacturer or retailer. Ultimately, every return is a reverse sale of some kind, and adds significant more costs to your business.

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Tony Sciarrotta
Best regards, Tony Sciarrotta tony@rla.org