It’s no secret that I like online shopping. Aside from the convenience of not having to leave home, I find that there’s usually better selection – and even better prices – online.
And now, online shopping may be about to get even better.
The Problem: Paying for Returns
As lucky as I’ve been with online shopping, I’ve had some curveballs thrown my way as well. I know I’m not alone on this; you buy something online, and when the product arrives at your door, it falls short. Maybe it’s a shirt that doesn’t fit, a new gadget that doesn’t work, or the item just doesn’t look like you pictured it would. So what do you do?
You return it.
But therein lies the problem. Even if you scored free shipping on your purchase, you’ll likely have to pay the shipping to send it back to the company. Who wants to shell out $5, $10, $15 bucks – or more, depending on the item – to return a product? It’s the epitome of wasted money.
The Stats: Free Shipping Impact
That’s the theory behind a new study from researchers at Washington & Lee University. Over more than four years, the research team worked with two large online retailers to track the spending habits of customers; they wanted to know how free returns affected consumers’ future purchases. Here’s what they found:
- Those who received free returns on their purchases increased their future online shopping expenditures between 58 and 357 percent over the next two years.
- Those who did not get free shipping on returns decreased future purchases between 74 and 100 percent.
The Solution: Universal Free Returns
The W&L team is using this study to suggest retailers adopt universal free returns. While the researchers admit that free shipping on returns is expensive, it may be an example of where short-term loss (paying for the return shipping) turns into long-term gains (more future purchases). The argument from the research team is that happy, satisfied customers will become loyal customers – who will spend more money.
Already, many online retailers do offer free returns to customers. Some – like Amazon – only offer free returns on certain types of merchandise; others – like Apple – limit free returns to a set amount of time after the purchase.