CSCMP's Supply Chain Quarterly
May 21, 2019
Forward Thinking

Retailers set to ban "serial returners," survey finds

Following Amazon's lead—and as a way to curb the high costs associated with reverse logistics processes—two-thirds of retailers say they would stop doing business with problem shoppers, ERP provider says.

Nearly two-thirds of U.S. retailers say they are considering banning shoppers who deliberately and regularly buy multiple items with the intent to return some, according to a survey released today by retail-focused enterprise resource planning (ERP) platform provider Brightpearl. The news comes as retailers prepare for the holiday peak shopping season and as many report an uptick in so-called "serial returners" over the last 12 months.

It also underscores the strain excessive returns place on the already-expensive reverse logistics process. The situation has caused some big-name brands to take action this year: LL Bean announced in February that it was ending its more than 100-year-old "no questions asked" returns policy, and in May, said it would begin closing the accounts of customers who request too many returns.

Following Amazon's lead, a quarter of retailers surveyed by Brightpearl said that introducing lifetime bans for problem shoppers is a necessary step to protect their margins. The survey also showed that nearly half of U.S. retailers would impose bans in order to save time and administrative resources—"an indication that chronic returns are eroding retailers' margins," according to the survey.

Among the survey's findings:

  • 42 percent of U.S. retailers say they have seen an increase in "serial returners" over the last 12 months;
  • 61 percent of U.S. retailers say they would ban serial returners;
  • 64 percent of all clothing and fashion retailers, 67 percent of consumer electronics firms, and 80 percent of baby and toddler retailers say they would implement similar measures to Amazon.

The survey showed that shoppers largely agree with retailers on the issue: 58 percent said they support bans for serial returners while just 7 percent disagree with such policies. Younger shoppers—those 18- to 24-years-old—are the most likely to disagree, the survey showed.

Although the ease and popularity of online shopping has given rise to the serial returns problem, Brightpearl also found that retailers are partly to blame, noting that many do not have the right technologies in place to identify repeat offenders. Nearly 60 percent of respondents said they cannot identify—or do not know whether they can identify—who their serial returning customers are, highlighting the growing need for new technologies that can track shopper behaviors.

Complicating the matter, just 21 percent of retailers said they think banning serial returners would lead to a reduction in return rates overall—suggesting that the growing number of returns in the U.S. retail sector is a trend that is here to stay, and that demand for technology to address the issue is likely to grow as well.

"In today's consumer-led retail environment, intentional returning could spell disaster for retail business owners if they do not have visibility over regularly returning customers," Derek O'Carroll, Brightpearl CEO said in a statement. "Without this, retailers will struggle with the definition and consistent application of their returns strategies—and could face a resulting backlash from shoppers."

"Banned: A Returning Problem," surveyed 4,000 online shoppers and 200 retail decision makers to examine what retailers are doing to combat serial returners and how consumers are reacting to those decisions. The survey was conducted by Brightpearl in association with OnePoll.

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