NEW YORK, Dec. 30, 2019 /PRNewswire/ -- A recent survey by leading monthly installment payment solution Splitit highlights the growing importance of consumer returns within the ecommerce industry. The Splitit survey revealed that a good return policy is not only key to overall customer experience, but directly affects web conversion and, ultimately, a retailer's bottom line.
Online return rates are expected to dramatically increase as the holiday season marches on and gifts are returned or exchanged. In 2018, roughly $400 billion worth of returns were made throughout the year in the U.S., with 25% of those returns made at Christmas time. American consumers were expected to return over one million packages to e-commerce retailers every day in December 2019. This trend is estimated to peak on January 2nd with roughly 1.9 million returns projected on what UPS has dubbed "National Returns Day."
The Splitit survey revealed that nearly 60% of consumers have returned an online purchase, with 38% having returned up to 10% of all online purchases they have made. Twelve percent of respondents returned a purchase within the past month, 11% within the last six months, and 18% did so within the last year. Splitit also discovered that 48% of respondents have purchased multiple variations of an item with the intention of returning one or more items, the process known as "bracketing."
More importantly for merchants, the survey demonstrates that a retailer's return policy weighs heavily on web conversion, with returns top of mind for consumers when deciding whether to make a purchase. The survey found that a staggering 52% of consumers have abandoned an online purchase out of fear of a difficult return process. This number increases to 67% for millennial respondents (ages 25-34), highlighting the heightened importance of a smooth return process for those who grew up accustomed to online shopping. And with 10% of consumers dissatisfied in some way with their last return experience, the survey results serve as a warning to retailers that returns are high stakes – with customer experience and overall sales at risk.
"Whether it's a fear of buyer's remorse or uncertainty about fit, our research shows that, today, returns are a top consideration for consumers even before their purchase is completed," said Brad Paterson, CEO of Splitit. "More than ever, we are seeing the importance of an easy return process to give consumers peace of mind and increase revenue, as returns are determining purchases long before a customer reaches checkout."
"By combining a simple and transparent return policy with flexible payments options like installment payments or buy now, pay later solutions, retailers are able to give consumers the confidence and the time to make the right purchase without creating a burden on their finances."
Splitit's survey also revealed the top qualities consumers look for in a return policy:
- 20% of respondents said a return shipping fee would make them less likely to purchase from a given retailer.
- 39% of respondents ranked "free shipping" as the overall most important feature of a good return policy.
- 30% of respondents ranked "no questions asked" as the most important feature of a good return policy.
The survey, conducted in November 2019, was jointly carried out with Google Consumer Surveys based on a representative sample of more than 500 respondents from the United States, aged 18-65+.
Splitit is a payment method solution enabling consumers and businesses to pay for purchases with an existing credit card by splitting the cost into interest and fee-free monthly payments, without the need for additional registrations or applications. Splitit's consumer solutions enable merchants to offer their customers an easy way to pay for purchases in monthly installments with instant approval, decreasing cart abandonment rates and increasing revenue. Splitit Business Payments allows manufacturers and suppliers to provide buyers with an interest-free, installment credit solution for purchasing goods and services utilizing their existing credit cards. Serving many of Internet Retailer's top 500 merchants, Splitit's global footprint extends to 27 countries around the world. Headquartered in New York, Splitit has an R&D center in Israel and offices in London and Australia.