Practical ways to reduce the cost of e-retail returns

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The retail industry faces many challenges, uncertainties around Brexit, increases in the National minimum wage and hikes in business rates. Add to this the Industry estimate that puts the overall cost of returns to UK retailers in 2015 at £60bn.*

If you are in e-retail then customer returns are part of your business – people order for choice and are likely to return part or all of their orders. It’s estimated that 30% of mid-range clothing and shoe sales are returned because shoppers still want to try before they buy. However, not all returns are always necessary, some can be due to faulty damaged goods or not meeting customer expectations*.

If you tackle the way that your returns are handled you could uncover significant cost savings – as well as increased customer retention.

In 2013, with returns of around 30%, the then chief executive of ASOS Nick Robertson, said that a 1% fall in returns would immediately add £10m to the company’s bottom line*.

So how can we help? If you are looking to reduce the cost of your returns, here are some pointers to get you started:

Make sure that you supply customers with detailed descriptions and good quality photographs of the product they are ordering – the better the web content then the more informed the customer is, helping to ensure that the customer expectation of the product is accurate. Put simply, this ensures that they are ordering the right product for them.

Ship your product in fit for purpose packaging – Product that arrives damaged is never good, it not only inconveniences your customer but impacts your brand and incurs additional replacement and logistics costs.

Make the returns process easier – The easier it is for the customer to return goods to you, the more likely they are to order again. Surveys show that 75% of customers are more likely to use a retailer with free returns. Ensure your packs are returnable, include clear returns instruction and cover reverse shipment costs. Having returnable packs also ensures that your goods are protected from damage on the return journey – rather than customers using “make-do” packaging to return them.

Turnaround Returns quickly – Don’t leave returned stock in a warehouse bay waiting to be repacked, get it back into the supply chain as quickly as you can. Failure to do so can impact your ability to fulfil future orders and potentially leave you with out of date stock for write off – needlessly impacting your bottom line.

Engage all departments in the return process – There is a lot at stake with returns, it can impact packing, logistics, procurement and customer services. Make sure that the whole business is aware of their involvement and work together to identify a solution that is right for your business.

Tackling the returns process is just one way that you can take control of your operational costs, if you would like to investigate other areas of potential improvement why not take a look at our business cost reduction pages at

*Returns are where under-fire retailers can fight back: