The true nature of returns in fashion e-commerce

Why do customers return items? This question has been on minds of fashion e-commerce executives for a long time. The answer might surprise…

The true nature of returns in fashion e-commerce

Why do customers return items? This question has been on minds of fashion e-commerce executives for a long time. The answer might surprise you — as nearly 70–75% of all returns in fashion e-commerce are unnecessary and can be prevented. In this post we shed light on the common misconceptions and motivations shoppers have for buying and returning.

What return forms are not telling

Ask any e-commerce manager about the most common return reasons in their shop, and they will instantly refer to the latest numbers from return forms.

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Size is usually one of the leading responses with an average 65–70% of shoppers stating this as the reason for their return. Finding the right size is a well-known and a long-standing problem in the industry, so it’s no surprise that people will return due to the wrong size and fit.

However, sometimes shoppers select this reason, because it won’t require any additional explanation. Size is typically placed at the top of the form, and a shopper will just tick this off to save time and not think more of it.

Return forms are used on an assumption that shoppers will be truthful and will pick the most suitable reason for a return. In reality, shoppers often don’t bother to find the right reason in a form and simply pick an option that will not raise any question. This is specially relevant in cases where a shopper intends to exploit return policies.

When a return is not what it seems to be

Why do shoppers exploit return policies? The answer to this question derives from the shopper’s motivation for making a purchase in the first place. In an ideal world, you buy what you want and, unless there is a problem with an item, you keep it and don’t need to think about returns. But e-commerce is more messy and complicated than that and that introduces other reasons for purchasing. For example:

  1. Buy-to-try The primary thing that separates the shopping experience in regular brick-and-mortar stores from online shops is the possibility of trying on fashion before buying it. Shoppers can test it out to find the perfect size, fit or put together a new look. In online shops this possibility is limited (fully or partially), so some shoppers will intentionally purchase more items than they intend to keep and will replicate this fitting room experience in their homes.

Common misconception: “Yes, shoppers will end up returning some items but at least they will keep some and will definitely be happy with their choice”.

Reality: It is a burden on the shops inventory and increases shipping and return costs. The shop failed to educate and provide enough information to help shoppers make the right decision.

  1. Buy-to-rent This is another example of shopping habits from brick-and-mortar stores being brought into e-commerce. “Buy-to-rent” is a behaviour when a shopper wears an item for a special occasion with a label still intact and returns it within the period allowed by the return policy.

Common misconception: “A full refund will only be allowed if the item is in good condition. So if the labels are not intact or an item has visibly been worn, there will be no refund. It’s a good protection for shops”.

Reality: This introduces additional costs to check, sort, and clean items as well as costs related to shipping and returns. This behaviour rarely translates into loyalty — shoppers simply use the policies to their advantage with little to no regard for the shop.

  1. Resellers A behaviour typically seen at flash-sales sites or during sales campaigns and deep discounts. Shoppers buy a lot of items at an attractive price, try to resell it, and return everything they didn’t manage to sell back to a shop.

Common misconception: “This will contribute positively to our revenue and GMV”.

Reality: Returned items are usually hard to sell (sales campaigns will be over), so it often turns out to be a loss for shops.

  1. Instagrammers With the rise of social media and influencer marketing, some shoppers purchase fashion for the sake of social media likes and subsequently return it back to the shop after taking photos.

Common misconception: “This can be an interesting social media campaign”.

Reality: As with the others, there are additional costs to check, sort, and clean items and the costs to ship and return. Similarly to the “buy-to-rent” scenario these returns rarely turn into a tangible business opportunity for shops (especially multi-brand shops or marketplaces).

What behavioural returns are and why you should care

Some returns are absolutely necessary and serve to mitigate shopper’s risk. What if the wrong item is shipped? What if the item looks different from the photos? What if the item is broken or damaged ? All these things occur regularly and a shopper must have the opportunity to return.

However, often returns happen due to a shopper’s mistake (for example, buying the wrong size) or intention to exploit return policies. These type of returns are called behavioural returns — as they happen because of a certain type of user behaviour during shopping (whether it’s a mistake or an intention to return). Behavioural returns usually contribute to 70–75% of all returns, so by addressing this issue shops can significantly reduce their returns.

As shown above, behaviour of users varies but all these types of returns have something in common— they are unnecessary and can be prevented.

For a long time, shops only focused on making the experience of return as pleasant as possible is essential to online shops — not a lot was done to prevent returns from happening in the first place.

By understanding the true motivation and nature of a return, shops can take measures to reduce these unnecessary behavioural returns.

At Easysize we use a machine-learning algorithm to figure out why your shoppers make purchases and whether they will return them. We analyse how shoppers behave on a website, what shopping and returns patterns they had historically, and how the same brands & items perform across shops. We continuously train our algorithm to recognise high-risk behaviours — whether it’s buying the wrong size, instagrammers, buying-to-rent etc.

To know more about the nature of returns and how Easysize works visit our website www.easysize.me.