October 10, 2016, 12:49 PM

The returns process: Where retailers fall short

An Internet Retailer study of 30 leading e-retailers finds that those merchants, on average, process returns in eight days—but many take much longer.

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Returns of online orders are a real hassle for consumers.

That was one of the principal findings of a recently released Internet Retailer report entitled, “Click, Ship & Return,” in which researchers tracked shipping speed, order processing and returns capabilities for 30 of the top online retailers in North America.

While most of the 30 retailers delivered orders fairly quickly, few did nearly as well when it came to handling returns. Only three merchants—Amazon.com Inc., No. 1 in the Internet Retailer 2016 Top 500 Guide. Gap Inc. (No. 20) and Nordstrom Inc. (No. 18)—made the process relatively painless, as they supplied return shipping labels, charged no restocking fees, and credited the buyer’s account promptly.

Most credits were refunded in seven to 10 business days, but some took much longer, and one retailer, Sears Hometown Outlet (No. 111), took more than two months to post a credit for a product returned on July 12.

Apart from Sears Hometown, the longest refund time goes to The Home Depot Inc. (No. 7 in the Top 500), which took 51 days to process a credit, followed by Williams-Sonoma Inc. (No. 21) at 44 days. Williams-Sonoma says the delayed refund was due to confusion about whether the returned item was a gift. Prior to the refund, the buyer was notified by email that she would receive a gift card as credit for the return, but a customer service representative was able to make the correction and credit the account after a phone call.

In some cases, returns were expensive. For some of the purchases in the study, the return shipping fees were more expensive than the original shipping cost. That was the case for Restoration Hardware (No. 52) with a shipping fee of $7 and a return shipping fee of $12.15; Build.com Inc. (No. 68) with a shipping fee of $9.99 and a return shipping fee $12.08; Wayfair Inc. (No. 24) with a shipping fee of $4.99 and a return shipping fee of $7.66; and QVC Group (No. 10) with a shipping fee of $5 and a return shipping fee of $8.95.

While the buyer’s return of an Amazon Prime order was seamless —Amazon included a printed return label and covered the cost of return shipping—the experience with an Amazon marketplace order was complicated and costly. The buyer completed a non-Prime order of bed sheets for $43.70. Upon return of that item (which required the buyer to send the item back to the seller, not to Amazon), the buyer ultimately paid $17.40 in return shipping fees. Amazon says most sellers have a return policy similar to its own, which states that items can be returned within 30 days of receipt of shipment in most cases, but that some seller return policies may vary. 

The experience with Gap, on the other hand, was pleasant in comparison to other e-retailers, as returns were free and took very little additional effort on the part of the buyer. In addition to refunding the entire transaction cost (including shipping fees) upon return, Gap provided a return shipping label with the purchase. Of the 30 retailers in the study, Gap was the only one besides Amazon to include a return label. The others had to be printed out.  

Printing a return shipping label likely is no big deal when consumers order from a personal computer, but orders increasingly come from a smartphone or tablet that is not likely to be connected to printer, and the label-printing requirement requires an additional step for consumers.

For more information on top e-retailers’ returns processing and delivery capabilities, click here to access Internet Retailer’s new report.

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