Retailers Face Rising Return Abuse as Consumers Adapt to Economic Pressures

In a recent report by Forter, titled "Flexible Policies, Risky Business," new insights into consumer behaviors around returns have emerged. With over 4,000 participants from the US and UK, this survey highlights a growing concern: 68% of consumers believe retailers make it too easy to abuse flexible return policies. The balance retailers need to strike has never been more delicate, especially as economic pressures force consumers to be more cautious and deliberate in their spending habits.

The Shift in Consumer Behavior

The dynamics of shopping have changed significantly, influenced by an economic landscape that promotes frugality. Many consumers are not merely shopping; they are strategizing. The report notes that nearly half of the respondents (49%) admitted to exploiting retailers' return policies in the previous year. The trend indicates a shift towards viewing these policies as tactical advantages rather than customer service conveniences.

Interestingly, the abuse of return policies is not solely about returning unwanted purchases. Among those who exploit these flexible policies, 29% reported doing so to sidestep full prices by purposefully buying items to return later. This behavior signifies a troubling new paradigm in online shopping, where 30% of consumers confessed to using an item before returning it, especially for high-priced goods that would normally be unaffordable.

Diving deeper, younger consumers (those aged 18-34) are emerging as the main offenders, with 46% of younger US consumers and 48% of their UK counterparts admitting to such practices.

Beyond Traditional Abuse

Beyond the well-documented return abuse, the study identifies additional concerning trends. Approximately 58% of consumers expressed that it is easy to create multiple online accounts with a retailer to take advantage of promotional offers. This multilayered exploitation showcases a shift in how savvy consumers engage with retail brands.

Furthermore, the quest for free shipping is leading to over-purchasing behaviors. As many as 21% acknowledged buying extra items solely to meet minimum requirements for free shipping, with plans to return what they don't want.

The Economic Consequence of Returns

As retailers cope with this trend, they also face the reality that consumers are increasingly discerning about where they spend their money. The report indicates that 48% of consumers prefer shopping from retailers with lenient return policies, which can be detrimental for those who opt for restrictive guidelines on returns. A staggering 16% claimed to have completely stopped shopping with a brand because of its stricter return policies.

Retailers are at a crossroads, balancing the necessity to prevent abuse with the need to maintain a customer-friendly environment. Ozge Ozcan, Chief Customer Officer at Forter, emphasizes that an inflexible approach may backfire, alienating customers when every sale counts.

"Policy abuse costs retailers billions, and adjusting to a savvy consumer base requires understanding and flexibility. Our findings reveal that a singular policy approach—whether in returns or loyalty programs—could expose retailers to significant risks," she stated.

Striking the Right Balance

To navigate these complexities, retailers need to leverage insights into customer behavior to create tailored approaches that mitigate fraud while accommodating genuine customer needs. It's crucial for businesses to balance lenient policies with necessary safeguards against abuse. By adopting a more personalized strategy, retailers stand a better chance to foster customer loyalty and protect their bottom lines.

To explore the full details of the report, visit the Forter Resource Center. As the retail environment evolves, staying informed about consumer sentiments and behaviors will be critical for future success.