Searching for a fix to retailer’s trillion-dollar problem
Online returns are plaguing retailers and weighing down profits.
39% of consumers now return items purchased online at least once a month, and retailers pay an average of $21 to $46 to process a single return. Return fraud is also rising — nearly 14% of retail returns were fraudulent in 2023, up from 10.4% a year earlier.
Some retailers are turning to technology to help.
H&M Group is an investor and customer in eComID, which uses AI to generate personalized shipping and return fees. The fewer items someone returns per year to a particular brand, the lower the personalized fee. H&M Group is seeing a 35% reduction in bracketing, or when people buy multiple sizes and return articles that don’t fit.
Other retailers, like Billy Reid, are using Tote, a fitting room booking platform. Shoppers can reserve items for a specified day and then go into the store to try them on. Billy Reid says in-store customers spend $200 more on average than online shoppers, and the rate of return on in-store purchases is lower.
