FarEye Survey Finds Nearly 90% of Consumers Will Hesitate to Shop with a Retailer that Charges for Online Returns

Chicago, November 10, 2022: FarEye today announced results of a survey of 1,000 U.S. and U.K. consumers exploring expectations around the returns experience leading into the holiday season, which found that 90% of U.S. and U.K. consumers will be cautious about shopping with a retailer that charges for returns. The survey also found that 50% of U.S. consumers and 32% of U.K. consumers will not pay for a return. These findings - amid reports of retailers looking to reduce the hefty cost of returns by charging consumers to return items - may result in lost customers and reduced brand loyalty.

“Returns are a problem for retailers, costing on average, 66% of the total purchase price, yet the retailer doesn’t see any revenue from the purchase,” said Kushal Nahata, CEO and co-founder, FarEye. “Putting the cost on the consumer is not the answer, however. Retailers need to take a critical look at their returns strategy to drive down costs in ways that do not impact the consumer, like offering multiple drop-off locations for returns to reduce carrier costs and drive efficiency. These survey findings - while not surprising - reveal a mismatch between retailers’ plans and consumer expectations.”

The survey, conducted in November 2022, explored consumer sentiment around the returns process and impact during the upcoming holiday season. Additional findings from the survey include the following key areas.

Holiday returns are rampant

About 61% of U.S. consumers and 51% of U.K. consumers made returns during the holidays in 2021, and 42% of U.S. and 53% of U.K. consumers anticipate making returns this holiday season. The trend towards purchasing multiple items with the intention of returning some of those items contributes to holiday returns. Twenty-nine percent of U.S. respondents and 48% of U.K. respondents admit they plan to do this during the coming holiday season.

Consumers want returns flexibility

Consumers also want a lengthy return time period. Upwards of 84% of U.S. consumers and 82% of U.K. consumers expect to be able to make a return between 30-90 days from purchase. These results confirm that the inconvenience of a returns policy may ultimately stop consumers from making a purchase.

Convenience in return drop-off key

U.S. consumers are most likely to return an item in-store, which is an opportunity for the retailer to recapture lost revenue as the consumer is likely to shop while returning their item. U.S. and U.K. consumers report returning items in-store about one-third of the time (37% and 35% respectively) with a post office or drop-off point being another preferred method of return (31% and 44% respectively).

“Consumer expectations will no doubt remain high throughout the holiday shopping season - one of the most profitable and critical revenue time-periods for retailers. As retailers continue to simplify the last-mile delivery experience, they cannot forget about the returns experience. This too should be just as simple as the delivery experience,” concluded Nahata.

Survey Methodology

FarEye surveyed 1,000 consumers between the ages of 18-60 in the U.S. and U.K. in November 2022.