Recently, the trade press has published a growing number of articles on the subject of “returns in the retail space”. Alongside questions such as “How can returns be reduced generally?” and “How can returned goods be used in an ecologically justifiable way?”, there is also the question “How can retailers continue to strengthen and enhance customer loyalty, including in the unpopular returns process?” Because one thing is certain: Even at the end of the value chain, processing should remain simple and straightforward so as to offer the customer a smooth, trouble-free shopping experience right through to the end.
To date, retailers have relied on generous return periods, with some offering up to 100 days. What’s more, the process should be transparent for the customer through simple and clear communication, and refunds should be given as quickly as possible.
These approaches are a step in the right direction, but Amazon, the trailblazer when it comes to customer satisfaction (some even say affectionately “customer obsession”), has recently started adopting simple new approaches designed to make it even easier for customers to return goods, keeping satisfaction and profitability high at the end of the value chain.
Percentage of online purchases returned in Germany
Amazon’s first major innovation is allowing shoppers to return articles without a box. In the USA, returns from Amazon can be handed in without a box or label at various return points. These include Amazon’s own locations, UPS Stores, as well as the department store chains Kohl’s and Whole Foods Market.
Further options and countries are sure to follow. The idea behind this approach is so simple that it would be easy to overlook: Customers want to SIMPLY return just one (unwanted) product.
The benefits are obvious:
The second major innovation followed hot on the heels of the first: Amazon customers no longer have to return goods worth less than 20 euro, and their money is refunded immediately. What customers see as a further simplification also has major economic benefits for the retailer.
According to the Consumer Association of North Rhine-Westphalia, collecting each return costs 15 euro, depending on its further use. As a result, every return below this value is a loss transaction.
In addition, the customer is responsible for what happens to the article, which is not put back into inventory. This type of processing is currently granted only to regular customers but could certainly be used more widely in the future. After all, this is another area where retaining customers is key, especially if the goods are damaged or have been delivered incorrectly.
Retailers must simplify returns to ensure customer satisfaction. By doing so, they can leverage this unpopular process to promote customer loyalty.
Amazon is showing the way here, and retailers must follow its lead with ideas of their own. And perhaps this approach will also inspire us in the medium term to make packaging and transport generally more sustainable. This is another area that customers increasingly value.