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How returns policies affect customer retention

The stats: Almost half (47%) of UK consumers won’t shop with an etailer that charges for online returns, per a study by ROI Hunter cited in Marketing Tech. A similar proportion of US shoppers—54%—say the same, per a Loop survey.

Why this matters: The survey results should be a warning sign for Zara and Boohoo, both of which implemented online returns fees earlier this year. But they’re not the only retailers that fail to consider the importance of the returns experience in developing customer loyalty.

  • Fifty-seven percent of consumers said a negative returns experience caused them to abandon a retailer entirely, per Loop.
  • A significant portion of US shoppers (41%) consider the lack of free returns and exchanges to be a dealbreaker.

The big takeaway: How retailers approach returns is often seen as an indication of their attitude toward patrons. Nearly all consumers believe that retailers with more generous returns policies care more about their customers.

While there’s no doubt the returns experience can be made more cost-effective, it shouldn’t come at the expense of alienating consumers. Instead of penalizing returns, retailers should improve the accuracy of the online shopping process by adding comprehensive product imagery (featuring a variety of models) and investing in AR try-on tech so shoppers have a better sense of what they’re buying.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.