The Hidden Costs of Returns

The ecommerce sector is continuing to grow as consumers seek to find ever more convenient ways to procure goods. The COVID-19 pandemic only ramped up this trend further, as people needed safe ways to buy products without visiting physical store spaces.

Despite the continuously growing popularity of ecommerce, there are challenges for retailers associated with it. One of these challenges is returns. While only 9% of in-store purchases are returned, a whopping 30% of online purchases are returned. This could be due to a number of factors, ranging from lenient return policies to just the simple fact that it’s difficult for consumers to know if they want to keep something without seeing the physical item or trying it on. Regardless, these high return rates pose a significant issue for retailers because of the time and financial losses associated with reverse logistics.

The problem is that when examining losses related to returns, retailers tend to remain focused on transportation cost per parcel when returns are so much more complicated than that, and there are more factors that affect the profit margin besides cost per parcel. Many hidden costs of returns plague retailers, and the larger the company, the bigger the problem. Check out the contents of the ebooks to learn more.