Buy, Try, Return: How UK retailers can stay profitable
For U.K. ecommerce brands, you can’t offer your customers a dressing room to try products on before they purchase them—so increasingly, shoppers are moving towards “Buy, Try, Return” behaviour, otherwise known as wardrobing.
In these cases, customers pay up front for multiple items, knowing they’re likely to return some or all of them. They’re confident that they can recoup all of their expenses thanks to your brand’s generous returns policy—but for brands, it’s not so easy to recoup lost profits. You’ll be stuck covering fees related to reverse logistics and restocking, and in many cases, the items have signs of wear and can no longer be sold as new.
How common is “Buy, Try, Return” behaviour in the UK?
Last year, we conducted a study on U.K. returns abuse trends, where 49% of merchants said that policy abuse was the trend with the biggest negative impact on their companies. Returns on ineligible items were the most common form of policy abuse, seen by 51% of brands, and 35% also said that wardrobing was a frequent issue.
Of the nearly 4 in 10 shoppers who admit to engaging in policy abuse (or knowing someone who has), 58% said they did so because they needed to know the size/fit of an item, followed by those who planned to use the item for a specific event and then return it (32%).
Another study found that U.K. retailers lose nearly £2 billion annually to returns policy abuse.
Strategies for stopping “Buy, Try, Return” shoppers
How can U.K. merchants fight back against fraud and policy abuse? Try these tactics:
Charge return shipping fees
If there’s no financial risk to them, shoppers are far more likely to purchase items that they’ll most likely send back. But if they know they’ll be charged for return shipping, they’ll probably consider their purchases more carefully—ensuring that they only buy products they intend to keep. This is why 64% of merchants now charge return fees, a 47% increase since the start of 2020.
Charging a flat-rate return shipping fee (say, £5) provides a disincentive for customers to wardrobe their purchases and can help you recoup the expenses related to restocking the item. You may consider waiving the shipping fee in the event that the shopper chooses an exchange instead of a refund, ensuring customer retention.
For online returns in the U.K., Loop’s Offset feature enables you to collect an upfront fee that subsidizes the cost of return shipping at the time of purchase, enabling you to reduce shipping label & software costs in your P&L while guaranteeing your shoppers a seamless returns experience later.
Worried about this affecting your customer experience? Consumer expectations around return fees have changed - 70% are now willing to pay for more convenient, premium experiences – and 50% already have.
Set up workflows to ensure products are return-eligible
To ensure that you’re only providing refunds on eligible items, it’s important to set up customised workflows to determine item condition on all returns. Start by using Loop’s returns portal to ask the shopper to verify the condition of the item, and even ask for a photo if you like—they should confirm that the item is in new, unworn condition before being granted a Return Merchandise Authorization (RMA). If it isn’t, you may reject the refund request altogether.
For approved returns, you should also set up an inspection point once the item is delivered to your warehouse or 3PL, ensuring that the item meets all criteria to be restocked and resold before granting a refund. If the item doesn’t qualify, you may choose to send the item back to the customer, deduct a fee from the refund, or choose to offer an exchange credit instead of a refund.
Putting these controls in place will help you avoid spending money on reverse logistics to restock ineligible items, so that you can control your costs more easily.
Deal with serial policy abusers
Most of your shoppers have good intentions when it comes to returning items—but don’t be afraid to take action against the small fraction of “serial returners” in your customer base.
Using Loop, you can segment your customers based on their behaviour, including how frequently they return products, and set up customised returns workflows for them. When customers have previously engaged in policy abuse, you can add them to a blocklist to prevent them from returning items in the future, or connect them with a customer support agent for manual review rather than automatically approving a return.
Striking the balance between customer experience and protecting profits
Many U.K. brands are wary of cracking down on returns policy abuse at the risk of alienating loyal customers with an overly strict policy. In our survey, 53% of them said they prioritised the customer experience over fraud or abuse protection.
By using returns management technology, you don’t have to choose between these two important factors. Loop makes it easy to set up controls and customised workflows that help you deliver a great customer experience to your loyal customers, whilst putting safeguards in place to stop abusers from damaging your brand.
Ready to learn how to optimise your returns experience and reduce “Buy, Try, Return” behaviour? Book a demo of Loop.
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With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.