Do the benefits of offering free returns outweigh the costs?

While retailers are on the lookout for new ways to shape their services to the convenience of the consumer, free returns have often been ruled out owing to the apparent shortage of direct benefits. Now, however, as the etail market matures and consumers become ever more confident, there is greater demand for free returns. Royal Mail director for courier, express and parcels Mike Brown says this is particularly the case for items such as clothing and homewares.

“While free returns require upfront funding, it can prove lucrative in the long term”

Mike Brown, Royal Mail

As a result, more retailers are reconsidering their approach, based on the argument that the long-term gains in repeat business and enhanced customer loyalty outweigh the drawbacks.

For the customer, free returns allow more choice and freedom to buy online without having to worry about the hassle and cost of dealing with an item that - for whatever reason - proves unsuitable. Brown says: “When consumers find what they want and decide to buy, they don’t want to worry about being restricted by a cumbersome returns policy.”

If customers know they can return items easily and quickly, they are more likely to make a purchase and could also purchase a wider range of items. “While free returns will require upfront funding, through improved retention rates and increased custom it can prove lucrative in the long term,” says Brown.

If the scale of a retail business makes such a service impossible, retailers can always try only offering it to their top customers at first.