The Challenge of “Slow Returners” for Retailers

Understanding slow returners

Slow returners are customers who, after purchasing products online, postpone the return process beyond the typical return window, usually 10+ days. This delay can be attributed to various factors, including buyer’s remorse, forgetfulness or the inconvenience of the return process. Notably, research indicates that while slow returners constitute around 11% of e-commerce customers, they account for 24% of all returns.

The financial implications

The procrastination of slow returners poses several financial challenges:​

• Inventory management:
  Delayed returns disrupt inventory cycles, making it difficult for retailers to manage stock levels effectively. This can lead to stock shortages or overstock situations, both of which are costly.​
• Cash flow disruptions:
  Extended return periods tie up funds that could otherwise be reinvested into the business, affecting liquidity and financial planning.​
• Increased operational costs:
  Handling returns after extended periods can lead to additional processing costs, especially if products are out of season or have depreciated in value.​

Collectively, these issues are projected to cost UK retailers approximately £5.8 billion in 2024, or 21% of all online non-food returns.

Strategies to mitigate the impact of slow returns

To address the challenges posed by slow returners, retailers can implement several strategies:

• Introduce a return fee:
  Introducing a nominal fee for returns can encourage customers to be more decisive in their purchases and expedite the return process. Research shows that while 50% of consumers might be discouraged by return fees, 61.9% of slow returners are willing to pay for returns.
• Encourage prompt returns:
  Sending timely reminders via SMS or email can prompt customers to return items sooner. Additionally, offering incentives such as store credit for quick returns can motivate faster action.​
• Diversify return options:
  Providing multiple return methods, such as convenient locker returns or expanded drop-off points, can make the return process more convenient, reducing delays.​
• Simplify the returns process:
  Implementing paperless returns and allowing customers to pre-purchase return labels can streamline the process, making it easier and faster for customers to return items.
• Shorten return windows:
  Reducing the allowable return period can create a sense of urgency, prompting customers to return items more promptly.​

Balancing customer satisfaction and operational efficiency

Whatever strategies retailers may decide to implement, it’s crucial to maintain a balance between operational efficiency and customer satisfaction.

Overly restrictive return policies can deter customers, while overly lenient ones can lead to increased costs. We advise taking a nuanced approach that considers both customer behaviour and operational capabilities.​

Slow returners present a significant challenge in the e-commerce sector, impacting both financial performance and operational efficiency.

By understanding the behaviours driving delayed returns and implementing targeted strategies, retailers can mitigate the problems caused by slow returns without damaging customer satisfaction.