Could Free Returns Be The Policy Of The Future?

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.

Readers, do you favor sites that offer free shipping on returns? All other things being equal, it’s the reason I shop at Amazon vs. another online retailer.

5 Responses to Could Free Returns Be The Policy Of The Future?

  1. I usually don’t think too much about returns, but I do think about the free shipping on the front end of the purchase. I am a huge fan of Amazon because of this.

  2. I usually only shop online at places that offer free returns (like Amazon…and I am a regular), yet I’ve only returned anything twice. The few more times that I ended up not wanting what I ordered, I sold it on eBay or Craigslist, lol.

  3. I do favor these businesses, especially if it isn’t a normal t-shirt or similar clothing item. It makes life easier and I am more confident shopping with that vendor even if it doesn’t make sense to be more confident.

  4. Very interesting research.

    If I am buying clothing or something I am not completely I like or will fit me I will make sure to only shop at stores that have free return shipping.

  5. Leslie says:

    Interesting post. Owning my own business (both brick & motar as well as online), I am no stranger to the costs of shipping…both inbound and outbound. Many of my suppliers offer free shipping when orders are of a certain size however the overall cost of offering a service like that is buried in the prices of their products. This is easier to do when the average item prices are higher. If I was to offer a service like that, my prices would go up because aborbing it would be too detrimental. In the end customers would pay anyway, it would just be spread out over all sales instead a specific return.