Retailers risk losing loyal customers if they get returns wrong, Klarna warns

Klarna has revealed in a news research that 84% online shoppers would turn their back on a retailer after a bad returns experience.

According to the press release, the research highlights the power of returns as a customer acquisition and retention tool, and the repercussions of getting them wrong. With 39% of consumers having done more shopping online since the pandemic, an increased reliance on returns means people’s patience is waning when it comes to clunky or costly returns processes. Therefore, 83% of online shoppers admit to getting frustrated by retailers which have an inefficient returns process, while 82% agree that retailers in general need to improve their returns capabilities. 

Demonstrating the need for retailers to keep up with consumers’ changing needs, some of Brits’ biggest frustrations with returns stem from the inconvenience of slow, out of date or inflexible returns processes. Over a third (36%) cited slow refund processes as the most frustrating element of returning items bought online, highlighting the importance of flexible payment options. Other frustrations include having to print off return forms when they don't have a printer (25%), the inconvenience of queuing to return at the post office (23%) and not being able to return items in store that they’ve bought online (21%). 

Exacerbated by the pandemic, these frustrations with the returns process are the driving force behind emerging shopping trends, as people find ways to avoid inconveniences. Over the past 12 months, a fifth (21%) of online shoppers say they have reluctantly kept an item they were unhappy with because it was too much effort to return it, 12% have avoided returning items at the post office because it's difficult to social distance, while 11% have gifted and 9% have resold items they don’t want instead of returning to the retailer. In the long run, this could mean people avoid buying again from retailers that don’t meet their needs.

Therefore, for those retailers that get returns right, this can serve as a competitive advantage, helping to attract new customers, and boost customer loyalty. 84% of online shoppers agree they’re more likely to buy from and 86% are more likely to come back to online merchants who offer free returns. However, even a little added inconvenience can come at a cost: over two thirds (70%) of online shoppers state that if a preferred retailer stopped offering free returns, they might not shop with them.