2020 is notable for its spike in Ecommerce volume, as consumers stayed away from stores in droves. By choice or by mandate, consumers dramatically shifted their purchase behavior to online channels. And with changing purchase patterns come changing merchandise return patterns, an under-reported component of the Ecommerce environment.
New data reported by Returnly, a provider of digital return experiences and post return payments, reveals some interesting facts and trends:
- December 26 remains the most important day for returns: Returns volume through the Returnly platform was 3.3x higher on December 26th compared to an average return day in the U.S.
- Prepare for a longer return season: The return journey starts on December 26th when consumers initiate returns online – but brands should expect it to take longer than usual for their items to ship. In January 2019, it took shoppers close to seven days to mail returns. With extra long return windows, fewer back-to-the-office routines and more people looking to avoid crowds, retailers should brace for an even larger gap and a longer return season.
Importantly, consumers are paying more attention to the value of returns in this new economic environment, perhaps even tapping returns as a source of supplemental income:
- COVID-19 sent consumers digging deep for old returns: From the time the pandemic began, shoppers started reaching progressively deeper into their closets to return older goods. The average age of returns (the time between placing an order and return creation) climbed aggressively week after week starting in mid-March and peaking in early August at 20 days, a near 100% jump from the start of the pandemic.
Returns are clearly an important driver of customer satisfaction for merchants, and the reassurance of a good return experience is key to encouraging future purchases. Credit and debit card issuers will certainly see effects of the behavior changes as well. Merchant credits, and consumer inquiry servicing about credits, are bound to rise, especially as consumers pay closer attention to returns and their economic value to the household.
The lengthening return windows are bound to make cardholder servicing more challenging. Of course, greater interest in making returns is bound to increase the incidence of disputes and chargebacks. But the card industry is a key enabler of Ecommerce, and servicing these new Ecommerce behaviors responsively is critical to maintaining cardholder satisfaction, and to supporting merchants rapidly growing their Ecommerce presence in the pandemic environment.
Overview by Ken Paterson, VP, Special Projects and Director, Customer Interaction at Mercator Advisory Group