Return Issues Bogging Down Retail Industry

The major eCommerce sites are now facing a logistical challenge in returns.

eCommerce has helped push the retail industry forward in recent years, but it is now going through a unique problem of its own.

The return rates for eCommerce products are much higher than the rates for in-store purchases. The rate of returns for brick-and-mortar locations is around 9%, whereas eCommerce stores report 25-30% return rates. This challenge thus places a heavy burden on eCommerce businesses. A large part of the challenge is that online shoppers have built up very high standards. If consumers return products to an e-Commerce business, they also expect store credit or a refund.

The combination of having to provide store credit or refunds while also paying for shipping to return the product can be too much. Having to deal with this process regularly is costing the eCommerce sector millions of dollars. Business Insider believes that eCommerce businesses will need to find a way to more effectively move returns back through their supply chains.

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6 months ago