Retail outlook: get set for ‘Returnless’ 2024, after ‘discount early’ 2023
If 2023 was all about slashing prices early to get cost-conscious US consumers spending, IGTV financial analyst Angeline Ong looks at why 2024 is going to be all about the rise of ‘no return’ policies amongst US retailers.
(AI Video Summary)
More US retailers enforce no-return policies
US retailers are faced with new challenges and are quickly adapting by implementing no-return policies. This means that more and more retailers are telling customers that they cannot return items if the cost of shipping the product back is higher than its value. For example, Amazon and Walmart have already implemented these policies. In fact, a survey conducted by GoTRG showed that 59% of retailers offered these policies in 2023, which is a significant increase from the previous year.
This shift towards no-return policies is a response to the rising costs of returns. In 2023, US shoppers returned 28% more holiday purchases compared to the previous year, resulting in $173 billion in returns. This is a big expense for retailers, as on average, a return costs them around $30. With customers becoming more conscious of costs and leaning towards online shopping, retailers are using these policies more frequently to protect their profits.
Goal of these policies
The main goal of these policies is to reduce the number of returns and the associated costs for retailers. By implementing no-return policies, retailers can avoid the expense of shipping and processing returned merchandise that might not be valuable to them. This allows them to maintain their profit margins and focus on more profitable endeavors.
However, it's important to note that not all customers may be happy with these policies. Some consumers may see them as a disadvantage since they lose the option to return unwanted products. High-value shoppers who frequently make expensive purchases may also be discouraged by the lack of a return option. Retailers need to carefully balance the need to protect their profits with maintaining customer satisfaction and loyalty.
Overall, the growing popularity of these no-return policies among US retailers shows the need to adapt to changing consumer trends and rising return costs. While these policies benefit retailers by reducing expenses and protecting profits, they may face challenges in terms of consumer perception and loyalty. Retailers must navigate this landscape carefully in order to achieve their financial goals while also meeting customer expectations.
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