How Stores Are Handling Returns During the Pandemic
It wasn’t just in-store purchases that stopped when the country went into lockdown. Many stores were also forced to put a hold on returns, leaving consumers without any way to get their money back for over a month. That led to a lot of pent-up demand.
IHL Group forecast there was between $150 billion and $250 billion worth of products waiting to be returned. According to IHL President Greg Buzek, less than one-half (40%) of stores had dependable returns processes in place before the pandemic. Those without such a process could be on the hook for significant costs. Clothing and similar products may need to be cleaned and retagged before reshelving, that’s on top of the personal protective equipment costs for warehouse workers. “If your processes aren’t optimized, you’re losing a great deal on every transaction,” he says.
The lockdown left many companies in a pickle. Stick to existing policies and let down consumers? Or rip up the policies and even the entire returns playbook? Here’s how some of the biggest stores handled returns during the pandemic.
Extended and Changing Returns Policies
Many of the largest omnichannel and eCommerce companies extended return periods as a result of lockdown, retail marketing consultant Armando Roggio writes. Amazon, for instance, temporarily extended some of its returns by as much as 90 days. Department store Macy’s also gave in-store shoppers an extra 30 days to return products and online shoppers an extra 60 days. Even smaller eCommerce companies were extending return windows, Roggio adds. Online clothing store La Perla, for example, extended their return policy to 60 days. They weren’t the only ones. USA Today’s Reviewed eCommerce writer Courtney Campbell lists 14 major retailers who extended their returns during the pandemic or made the process more lenient, including Apple, Sephora, Bed Bath & Beyond and H&M.
No one was more lenient than Kohl’s, though, which extended its 180-day return window by another 30 days. Kohl’s CEO Michelle Gass told USA Today that the store would go above and beyond to help consumers. “We also have a ‘just say yes’ attitude so if people are returning things and it’s outside that [return window], we will meet the customer’s needs,” she said.
Companies made changes to their returns policies too. As an essential store, Walmart was able to stay open during the lockdown. It continued to handle some returns and exchanges in its stores, reports Herb Weisbaum at Consumers’ Checkbook, with the exception of food, cleaning and pharmacy products. The store asked customers to start the returns process online instead.
Extending return windows isn’t without issues, however, writes Red Stag Fulfillment’s Vice President of Marketing Jake Rheude. “A larger pool of potential returns can make inventory management more complex,” he explains. “In addition, consumers expect merchants to continue extended return times even after the pandemic.”
In-Store Return Partnerships
In-store return partnerships are beginning to thrive again as stores reopen. These are networks of brick-and-mortar stores consumers can return online orders from a range of different brands. There’s no shortage of companies facilitating in-store returns, writes Marie Griffin at Retail TouchPoint. “These locations include physical stores that take in returns for other retail brands, as well as office buildings, post offices and shipping company stores, kiosks and more,” she notes. Such services don’t just offer more convenience to consumers; they are also a more efficient and cost-effective solution for brands.
Staples announced in October that it was partnering with returns company Optoro to accept in-store returns from any other retailer using the company, writes ModernRetail’s Anna Hensel. This means the store will accept returns from brands including Target, Best Buy and Ikea.
Hensel sees the move as one way to encourage foot traffic at a time when consumers are still cautious of shopping in person. Still, it may not be enough to secure more sales, she says. “What’s unclear…is just how many of these shoppers who go to a retailer’s store to return items they bought from another retailer end up making a purchase in store.”
FedEx also partnered with a returns company in October, reports Anthony Brown, associated editor at SupplyChainDive. Happy Returns offers in-person returns at more than 2,000 FedEx locations across the country. Happy Returns has quadrupled the number of return locations as a result of the partnership.
QR Codes and Other Contactless Methods
QR codes never fulfilled their promise in the retail world, writes fashion reporter Danny Parisi at Glossy. “But the pandemic is leading fashion brands and retailers to try anything to convince customers that stores are safe, disinfecting constantly, limiting foot traffic and making as much of the shopping process as contactless as possible. QR codes are the latest way brands are making that appeal,” he says.
Happy Returns, for instance, has been able to make its return process virtually contactless through the use of QR codes, says Retail Leader Executive Editor Gina Acosta. In the wake of the pandemic, the returns process is now started when consumers scan a QR code, eliminating the need for a store assistant. Happy Returns has made the process completely contact-free by having consumers deposit their items in sealed bags and then inside tote bags ready for shipping.
One brand that’s made use of such returns is Dressbarn. Speaking to Retail Bum’s cofounder Romana Hai, Dressbarn CEO Shayan Zadeh explains: “Having enjoyed our physical stores for decades, our shoppers are accustomed to the convenience of in-person returns. To meet these customer expectations while also growing our online presence, Happy Returns’ network provides Dressbarn shoppers with the accessibility of a physical drop-off location while still maintaining a contactless experience.”
The plan seems to be working. Within a month of the partnership, three-quarters of returns were made using QR codes. Yet DTC brands don’t have to partner with companies like Happy Returns to provide consumers a contact-free return experience. Offering an effective online solution can help consumers avoid physical contact altogether too.
Larisa Summers, Senior Vice President of Marketing at Optoro, recommends creating a “user-friendly online returns portal” that makes it easy for customers to return products. Redirecting customers to your website increases the chances they’ll make another purchase too. It also helps avoid another returns-related issue that Summers raises, which is when customers return online-exclusive or seasonal products in-store.
Quarantining Returns Before Resale
It’s not just the process of receiving returns that brands are having to tackle, points out retail reporter Lauren Thomas. “The crisis also raises the question of what companies will be doing with all of that returned merchandise after this pandemic passes,” she writes. “It might not be as easy to resell certain items that have been handled by other consumers.” Brands will need to add extra measures before items can go back on the shelves.
One company taking the lead in this department is American Eagle Outfitters. They have created touchless return bins in their stores, explains Chief Commercial Officer Andrew McLean to Business Insider. “As part of our comprehensive reopening plan, we worked with medical experts to create a seamless and efficient process which helps to ensure the health and well-being of both our store associates and customers,” he says. Returned clothing “will remain out of circulation for 72 hours before being steamed and returned to the floor.”
Nordstrom is also quarantining tried and returned products for 72 hours before putting them back on sale, writes NBC business reporter Leticia Miranda, while Gap is holding pandemic returns for 24 hours. So, too are brands owned by PVH. Chairman and CEO at PVH Corp. Manny Chirico says goods returned to Tommy Hilfiger, Calvin Klein, Geoffrey Beene and other brands will be quarantined for between 48 and 72 hours before being resold.