eCommerce Return Fee's
Should you charge your customers return fee's?
By Commerce Returns
Published on July 12, 2021 - 2 Min Read
eCommerce returns are on average 3 times higher than traditional retail returns (30% vs 10%). This fact poses a unique set of challenges to both the seller as well as the customer.
With 80% of the consumer base wanting free returns, 50% of retailers have responded. However, defaulting to offering free returns might not be the right option for you particular business. So what should you do?
Actually, there is a lot of misconception out there stating that returns must always be free. This is not always the case. Although true, a customer is price sensitive, and of course given the choice they will opt for the free option - however not all returns are free of charge.
The origin of Free Returns
So why is there a consumer expectation of free returns? The origin of free returns likely stems from the unspoken standard that Amazon sets in the industry. Amazon has pushed the envelope of consumer expectations, free shipping, same day delivery, free returns. The financial reality of this is that its not always feasible. Amazon has actually rolled back their return policy for some time now. Returns are only free in certain cases, in others you must pay a return fee.
Factors for Charging Return Fee's
So getting back to our original question, the answer to "Should I offer free returns to my customers?" is held in the below three questions.
- How much does it cost to ship the product?
- What was the sale price of the product?
- What are your margins on the product?
Since there are a few permutations to the answers, we have built the Returns Fee Calculator to do this legwork for you. Simply enter the ranges below, and find out what your business should do.
Return Fee's Calculator
Our Return Fee calculator will help you determine if you should or shouldn't charge return fees. Adjust the below three ranges, click Calculate, and find out how to best structure your return fee's.
Questions?
If you would like to continue this discussion, feel free to reach out to us directly at [email protected]
