Three in 10 small and medium enterprise (SME) online retailers complain that so-called “serial returners” are harming their profit margin.
Serial returners, or consumers who deliberately over-purchase to take advantage of free delivery and returns, are causing a “dilemma” for smaller businesses, which need to make a profit while keeping up with larger rivals.
According to the Barclaycard study, 52 per cent of SME retailers say this has a negative impact on the day-to-day running of their business and 21 per cent said they have increased prices to counteract this cost.
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It found 58 per cent of shoppers say a returns policy affects their online purchasing decisions. Of these, 47 per cent said they wouldn’t order an item if they needed to pay for the returns themselves.
Over the last year an increasing rate of returns has led to 31 per cent of SME online retailers saying there had been a negative effect on their profit margin.
“Faced with more choice than ever before, alongside a range of different clothing and shoe sizes, it’s hardly surprising that this new breed of online shopper – the serial returner – is starting to emerge,” said Sharon Manikon, director of customer solutions at Barclaycard Global Payment Acceptance.
“Online spending will continue to rise and the need to keep pace with customer demands presents a dilemma for the UK’s SMEs, who need to protect their bottom line, but also compete with the larger players on the high street.
“Fortunately there is light at the end of the tunnel, with many ways to streamline the returns process. From developing universal sizing to offering virtual dressing rooms, the key for SMEs is to determine which solutions work best for them to ensure they don’t lose out to their more savvy competition.”