Ecommerce News

‘Cost of returns could cripple smaller retailers’

Customers in the UK increasingly expect it won’t cost them anything to return the goods they ordered online. But this could lead to over 200 smaller ecommerce companies failing, a new study by ParcelHero shows. Many smaller online retailers feel the pressure to pay for the cost of returns, as want to maintain high customer service ratings.

But this attitude could eventually cripple these smaller online retailers, the new report “Retailers reach the point of no returns” shows. Traditionally, at the beginning of a new year, many online retailers have to process lots of returned orders. For example, the second of January was dubbed ‘Take back Tuesday’, as it was the first working day of the year and many consumers tried to return their unwanted Christmas gifts.

Half of shoppers want retailers to pay for returns

According to eDelivery, returns reached 47 percent of all ParcelHero shipments in the first days of this year, with online retailers saying they were pressured into paying the cost of returns for unwanted items. ParcelHero thinks the situation will get worse this year. “Smaller online businesses have been left reeling as half of all shoppers demanded they pay for all returns, not just faulty goods”, says David Jinks, head of consumer research at ParcelHero.

Of course, consumers have the right to return goods they’ve ordered online within 14 days. “But we’re not sure some of the returns we see at this time of year are entirely in the spirit of the Consumer Contracts Regulations”, Jinks adds. “Last Take Back Tuesday, for example, 37 people returned Christmas decorations with us. How odd that the day after New Year people suddenly find they don’t need them.”

He also said that party dresses were the most popular return, followed by child car seats (which come in handy if you have to visit family members all over the country for the holidays). Last year, several flight cases, 35 snowboards and 600 skis and skiing jackets got returned in the first week of the year.

Returns as high as 60 percent

“Canny shoppers are squeezing the most from the Consumer Contracts Regulation’s 14 day no quibble law – and this is concerning for smaller traders who can’t afford the cost abnormally high returns incur”, Jinks says. “Returned items are now costing British small and medium-sized online retailers over 22 million euros a year and some online retailers see returns as high as 60 percent over the Christmas and New year period.”