Jun 21, 2022
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Most consumers more likely to buy from e-stores with free returns

Jun 21, 2022

UK small businesses lost an average £15,600 a month due to serial refunders in 2021, according to card payment provider Paymentsense. But ending free returns would be a dealbreaker for many UK shoppers, it said.

Photo: Pexels

It claims online returns alone cost UK retailers an estimated £5.2 billion a year on average with one in three UK customers now returning a product once a month.

Although online sales have increased by over 46% in the UK since 2020 and 38% of UK online shoppers now feel more confident in returning online purchases, this has led to an increase in the number of customers who return purchases at an excessive volume, its Serial Refunder report claims. 

Its research also showed clothing returns were ranked fifth out of 10 sectors with the average amount refunded per month standing at £190, behind Trade & Trade Supplies (£514) and Home & Office Furnishings (£485) in the top two positions.

Analysing over 54,000 Paymentsense card machine transitions across the UK, its research also shows 78% of customers were more likely to purchase from a business online if they offer free returns.

Paymentsense also looked at the top 500 retailers in the UK to see which customers were searching the most for free returns. Amazon came out on top, with on average 4,400 searches per month. 

Following Amazon is ASOS, and at the bottom of the top 20 is Urban Outfitters with 170 searches per month. Zara previously offered free returns to customers, however the company has recently announced that customers will now have to £1.95 for returns in a bid to recoup some of its costs.

Meanwhile, the three most common reasons causing recurring refunds were: returning items due to unnecessarily ordering the same item multiple times; having issues with the item's arrival or condition; and using purchases and then returning them for a full refund (also known as ‘wardrobing’).

Jon Knott, Head of Customer Insights at Paymentsense, said: “Most online retailers have evolved their returns policy to meet customer expectations and demands. This year in particular, many businesses have implemented free delivery and returns, as well as offering multiple ways of returning an item, either in-store or online. 

“The rising dominance of online shopping was predicted to happen due to convenience and easier price comparison. However, this transition was sped up massively during the pandemic as lockdown restrictions caused more people to stay at home, as opposed to heading out physically to the shops. As online shopping continues to rise in popularity, businesses are seeing higher levels of product returns as consumption increases to an all-time high.” 

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