January 13, 2006, 12:00 AM

Ease of returns means happier repeat buyers, study says

Customers who took 15 minutes or more to process a return to an online retailer were consistently less satisfied with their retail experience, decreasing the likelihood that they’d return as buyers, a new study from Michigan State University says.

Kurt Peters

Executive Editor

Customers who took 15 minutes or more to process a return to an online retailer were consistently less satisfied with their retail experience, decreasing the likelihood that they’d return as buyers, a new study from Michigan State University says.

“Companies should view returns as a key component of marketing to the customer, rather than as an annoying disturbance in the supply chain,” says Kenneth Boyer, director of the Last Mile Supply Chain Center at Michigan State University’s Broad College of Business, which conducted the study.

The study surveyed 464 customers of five retail web sites-1-800-PetMeds, Backcountry.com, eBags, 6PM.com and OfficeDepot.com-and found a positive correlation between the ease of processing returns and shoppers’ stated interest in continuing to shop at the same merchant.

Shoppers who took 1-9 minutes to process a return rated their satisfaction with retailers over 6 on a scale of 1-7, while those who took 26 minutes or more scored retailers at under 6 on the same scale.

The study also found that consumers received confirmation of a returned packaged in as quickly as 2.51 days at one retailer to as long as 6.84 days at another. The time to receive a credit for a return ranged from 5.54 days to 10.34 days.

“The results show that retailers that handle returns smoothly and make the process relatively easy gain business in the long run,” Boyer says. “Customers are fairly tolerant of the reasons why returns are necessary, as long as companies provide a fair and accessible returns process. Customers compare different retailers based on their experiences and a positive/negative experience can make or break a retailer.”

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