Studies show consumers return one in five online purchases.
For retailers, the revenue generated from reselling a returned product often doesn’t cover the cost of processing the return. Many retailers are no longer requiring customers to return a recently purchased and unwanted product in order to get a refund. They often tell customers to “just keep it,” meaning they get both the refund and the item.
The “returnless returns” strategy has become more common. In a 2023 survey of over 500 retail executives, 59% used returnless returns compared to 26% the year before. Cost cutting isn't the only benefit, according to new research from the University of Notre Dame.
Returnless returns can increase brand support by fostering goodwill, according to John Costello and Christopher Bechler, assistant professors of marketing at Notre Dame’s Mendoza College of Business. They conducted nine lab, field and online studies that showed consumers who are offered returnless returns are more likely to patronize the brand and share positive feedback compared with others doing standard product returns.
“Specifically, returnless returns increase brand support when proof of the problem with a product is not required, the decision is framed as specific to that consumer and situation, the brand provides a consumer or environmentally centric motive for the decision and the brand suggests donating the kept product,” Costello said in a press release.
Bechler said they found that increased brand support generated through returnless returns can sometimes be greater than the support generated when a consumer appears to be happy with a product and does not initiate a return.
Some brands, including Chewy and Bombas, offer a blanket returnless policy for all customers and situations, while others, like Amazon and Walmart, use a case-by-case basis.
While blanket returnless policies may appear more likely to boost brand support because consumers may feel they could be excluded by brands with selective use, the study shows the opposite is true.
“Drawing from our theory that offering returnless product returns boosts brand support because they increase brand warmth, we find that returnless policies implemented on a case-by-case basis are actually more effective for a couple of reasons,” Costello said. “The consumer feels they are getting special treatment. Also, because they are getting human interaction rather than an automatic email, the customer feels additional warmth toward the brand. So, increasing the level of ‘humanness’ in digital interactions has proven beneficial.”
Suggesting that customers donate the kept product boosts perceived brand warmth and support, as does providing reasons that articulate the brand’s desire to put the customer first in their product return processes.
The findings offer insights for firms that are designing or updating their product return policies and would like to improve how they are viewed by customers who seek to return purchases.
