Most retailers have caught on that online consumers like free shipping, but the potential expense of mailing back unwanted or ill-fitting goods still keeps many people from hitting “confirm order” in their e-commerce shopping carts.
Enter Return Saver. For $49 per year, the new program from Middletown, Conn.-based Clarus Marketing Group promises “easy access to free return shipping” via FedEx Ground — for packages in standard-sized boxes that weigh under 50 pounds and are sent within the 48 contiguous United States.
The company in 2001 launched
freeshipping.com, a subscription service offering cash back and free-shipping deals at roughly 1,000 online stores for roughly $13 per month.
It was that program that uncovered a problem with retailers’ shipping programs, only a small percentage of which, like shoe destination
Zappos.com, offer free returns.
“We started digging into our data and found that, in most cases, the price and the process of trying to get those items back to the retailer was a pain point for the consumer,” said Clarus CEO Tom Caporaso.
Online sales hit $258 billion in the United States alone last year, up $33 billion, or nearly 15 percent from 2012, and are projected to continue making up an ever-larger share of total retail sales each year. But Caporaso says that growth could be even more aggressive if return shipments were easier.
San Diego State University lecturer Steven Osinski said the cost of possibly having to send something back still causes many shoppers to abandon their online orders altogether.
Of the Internet sales that are completed, about one-third get returned, according to retail consulting firm Kurt Salmon. And in most cases, it’s a pricey hassle for consumers, Osinski said.
Even though 39 percent of the top 100 retailers send a prepaid shipping label for returns, according to Clarus research, they deduct the shipping charges from your refund.
With 23 percent of the retailers studied, the customers were solely responsible for return shipments.
Only about 6 percent of the top 100 retailers offer free shipping both ways, Caporaso said. He argues that giving consumers peace of mind about making returns could drive more online sales.
“Looking at the broader data that’s out there, more and more people are looking at the returns policy before they’re making a transaction online,” he said.
In one report by research firm MarketingProfs, the ease of making returns and exchanges ranked second on online shoppers’ wish lists, behind the availability of free or discounted shipping.
Osinski pointed out that Return Saver doesn’t necessarily make shipping easier. Even though you don’t have to pay on a case-by-case basis, you still have to print a shipping label, locate a box and drop your package off at the nearest FedEx location.
If you’re a frequent returner though, he said, the money savings alone could make the program worthwhile. Given that a single 1-pound parcel shipped from San Diego to Middletown via FedEx Ground costs $8.91, it wouldn’t take many returns for the membership fee to pay off.
“For the consumer, especially the heavy-return consumer, this might be a very good opportunity,” Osinski said. “But I don’t know how it’s going to work out for ReturnSaver.
“I think it’s a clever idea, but it won’t be an earth-shattering, changing-the-world e-commerce play.”
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