Cost setback

Shoppers shun online retailers charging for returns

Zara in St James Quarter
Zara is among those charging for returns to reduce costs and cut down on waste (pic: Terry Murden)

Almost half (47%) of shoppers would not buy from an online retailer which charges for online returns, according to new research.

The survey of 2,015 UK consumers found that price is still the most important influencing factor in online purchasing decisions. As a result, even a small uplift could run the risk of putting shoppers off at a time when many have already changed their shopping habits just to make ends meet.

The findings, by product performance management platform ROI Hunter, may concern fashion giants such as Zara which have introduced charges for customers to return online purchases. Ecommerce leaders like ASOS have admitted to feeling the effects of “serial returners”.

One in three items bought online are returned, with many consumers deliberately ordering a range of sizes and styles and sending back the ones they do not want. Some are ‘wardrobing’ – wearing a product for an event and then returning it.

Boohoo partly attributed a 94% slump in before-tax profits to the end of February to the number of returns being made post-lockdown 

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Karel Schindler, CEO at ROI Hunter says: “The cost-of-living crisis, rising competition for the cash consumers are willing to spend, and evolving privacy rules are creating a perfect storm for online retailers.

She added: “Retailers charging for online returns run the risk of losing customers at a time when they need them most. The better way to curb the cost of returns is to reduce the number of returns happening in the first place.”

It’s not just pricing where UK consumers are holding online retailers accountable; 38% say they will boycott a brand that serves them irrelevant ads, and nearly a third (31%) would stop shopping with a retailer which served them an insensitive ad.

Despite the risks, six in 10 consumers say they have been served ads for irrelevant products, and 50% for out-of-stock items, indicating that many retailers are still wasting budget on ineffective advertising.

Retail group meets

A new group established to help Scotland’s retail sector as it recovers from the pandemic has discussed soaring energy costs and the impact of Brexit.

At its first meeting, the Retail Industry Leadership Group (RILG) also considered how to deliver the Scottish Government’s Retail Strategy and began drafting priorities to help businesses grow.

The group is co-chaired by the Minister for Public Finance, Planning and Community Wealth Tom Arthur and the chief operating officer of the John Lewis Partnership, Andrew Murphy. It comprises senior business representatives, trades unions and industry groups.

It will work with the Scottish Government to help the retail sector meet current and longer term challenges while becoming stronger and more resilient. Fair Work and achieving Net Zero goals will underpin the group’s work.

Mr Arthur said: “This first meeting of the Retail Industry Leadership Group was timely given the cost crisis we are facing.

Andrew Murphy
Andrew Murphy: encouraged (pic: Terry Murden)

“There is no single solution to helping retailers so, as we approach a challenging winter, it is essential the response from government at every level happens at speed, to address the nature and magnitude of the emergency.

“We support calls from businesses for measures related to energy prices, VAT reduction, staff shortages and handling business loans – direct support which falls within the reserved responsibilities of the UK Government.”

Mr Murphy added: “I was encouraged by the positive and collaborative nature of our discussion. Given the scale and nature of the collective challenges we are all facing, this is both timely and vital.”

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