Retailers are also looking to provide customized experiences for different types of customers. “For their best, most loyal customers, they may offer faster outcomes. For other customers, they may wait to issue refunds and start exchanges until after they inspect the item and ensure it can be restocked and resold,” she says. Kelly also notes that other tech features can help with revenue retention, such as “instant exchanges” that encourage shoppers to choose a new product for an exchange rather than completing a return for a refund immediately. “Automated returns can streamline shipping and handling and make the process less costly, even while offering flexible return options such as self-shipping, drop-off, or in-store returns,” Kelly says. KEEP-IT POLICIES AND RETURNLESS REFUNDS In 2017, Amazon introduced the
Many retailers, including popular fashion brand Zara, have moved away from offering free returns for online orders. The large increase in volume has driven up reverse logistics costs, thereby undermining profit margins. Instead, merchants are offering free returns to stores or introducing return fees for online transactions, hoping this “friction” will keep shoppers from buying items they’re unsure about.
“Using predictive analytics to understand where fraud and abuse are more likely to arise can also be a great help,” adds Kelly. THE BENEFITS OF ‘FRICTION’ IN RETURNS Some retailers, however, are shifting away from free returns. The large increase in the volume of returns has driven up reverse logistics costs, thereby undermining profit margins. Against that backdrop, many brands, including H&M and Zara, have halted free returns and implemented return fees. “Return fees encourage consumers to be more mindful of what they are purchasing while discouraging abusive behavior,” Kelly says. “By implementing return fees, brands can introduce friction into the process that will make shoppers less likely to buy items they’re unsure about.”
operations during peak return periods and reduce environmental impact by minimizing unnecessary shipping.” Keep-it policies are best applied to low-cost items—for instance, those less than $20—or to goods with minimal resale potential. Otherwise, Hilton says, “issuing refunds without product recovery can lead to revenue loss and missed inventory-recovery opportunities. “The downside includes risks of abuse, as lenient policies may incentivize fraudulent claims, and overuse could devalue the product or brand,” she adds. “To use this approach strategically, businesses should define clear guidelines, limit the policy to specific product categories or customer segments, and leverage analytics to detect fraud. “By balancing cost savings with controlled application, keep-it policies can enhance customer satisfaction and operational efficiency while protecting profitability,” Hilton says.
returnless refund, which quickly gained popularity across the retail landscape. “It established a new standard for brands by automatically processing refunds without requiring customers to send the item back,” Kelly says. These “keep-it” return policies allow retailers to avoid return shipping costs when the product is too inexpensive to process profitably—making it more efficient for the customer to simply keep or donate the item. Keep-it policies also help reduce reverse logistics costs and improve customer satisfaction by eliminating the need to return low-value items or items with high shipping costs. “These policies cut down on transportation, labor, and restocking expenses while offering a hassle-free experience that fosters customer loyalty,” Hilton says. “They also streamline
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