Getting Burned by Returns

The ongoing growth of online sales – and the corresponding rise of in-store returns – has turned into a lose-lose proposition for many store operators, finds a new survey by Retail Systems Research (RSR) for technology provider Jumpmind.

“Our polling of retail executives and store managers shows the increasingly growing volume of orders being bought online and returned to stores is crushing many retailers, as they struggle to keep up with new costs and new workloads from in-store returns processing,” the survey summary notes. “Meanwhile, retailers aren’t capitalizing on the theoretical upside of returns to ring up more sales in the store.”

While a majority of retailers encourage online shoppers to process returns in-store, 43% admit handling online order returns in-store is a top challenge, and that increased volume of online order returns to stores has created new costs. More than 20% say their stores were not designed for today’s more advanced customer service functions (order pickup, online returns, etc.). And 41% report omnichannel fulfillment and returns require new in-store sales rep roles and workflows.

“Those retailers whose returns processes have not been overhauled since their (likely) creation during the pandemic are particularly challenged, as the processes they cobbled together in a hurry are not fit for today’s scale of returns,” said RSR Managing Partner Steve Rowen. “The ability to accept a return is one thing; the ability to profitably handle that merchandise is far more complex.”

In a similar vein, Jumpmind Head of Strategy and Customer Success Lauren Cevallos notes that “retailers are not capitalizing on in-store returns in the way they expected. Instead, the cost and complexity of handling online returns is weighing down retailers’ store efficiency and profitability. Many are using disparate and legacy systems that make the process more challenging – for both store associates and customers. The time is long overdue for retailers to modernize their in-store systems to minimize the pain and friction around returns and deliver on the promise and benefits of buy online/return in store.”

Click here for more from the survey.