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Returns could spell the end for small DIY Retailers

“If you need any tools for a small quick job, use it for the day and, after a good bit of cleaning and baby oil, it will be good as new. You can just return it as unused.”

Although damaged and faulty returns are a necessary part of any business, canny consumers have started to abuse their right to return at the cost of businesses’ profit margins. New findings from courier comparison site ParcelHero suggest that amateur DIYers are getting around the cost of hiring professional tools, needed for a one-time job, by buying, using, and then returning the equipment they need.

Returns cost UK retailers £60 billion a year, with online businesses facing 13% more returns thanks to unique legislation that leaves them open to exploitation. And though it is clothing stores that see the most returns, ParcelHero’s new returns report suggests that increased returns from the festive season could spell the end for businesses of all shapes and sizes.

No Questions Asked

One problem is the 14 day ‘cooling off’ period that all online purchases are subject to. This allows customers to return goods within 14 days of receiving them with no questions asked. There are only a few exceptions to this rule – goods that are perishable, custom made, or unhygienic when returned – but essentially, retailers of any description have battled with this.

It’s thanks to this cooling off period that online returns cost more than offline returns – where stores have no obligation to accept returns when customers change their minds – but more importantly, the cooling off period make returns scams like the one we highlighted above possible.

Returns are skewed towards the consumer

In ParcelHero’s report, a conversation with an employee at national clothing chain Topman, who explained some of the scams that they have come across. These scams are by no means isolated to clothing stores; ParcelHero also spoke to one consumer who spoke up about how he kept his own DIY projects from getting too expensive.

“It’s very easy to do,” he said. “All you need to do is make sure that your packaging is salvageable and you are all good.”

When we asked him what sort of things he had returned, he told us that it was “realistically simple to return all sorts.”

Thankfully, retailers are protected by this sort of abuse by the law. Although businesses are obliged to accept returns, if they are not in an acceptable condition, they are allowed to issue partial refunds. However, the savvy consumer had a solution for that too.

“Just use it for the day and, after a good bit of cleaning and baby oil, it will be good as new. No one will be able to tell it was used.”

A Great Returns Policy is Vital

Despite the doom and gloom, ParcelHero’s report suggests that returns could be more important than you think. More than 80% of the consumers spoken to sad that a good returns policy would make or break their purchase. Only 8% said that they didn’t check the returns policy before making a purchase.

Consumers also increasingly expect more from returns than ever, with nearly half of consumers saying that they expect the retailer to cover the cost of their returns – even if it is only because they changed their mind. Small businesses in the report said that they can’t afford to do that – the costs of offering free returns would likely put them out of business.

What’s the Bottom Line?

As online shopping becomes more and more prevalent, the pressure to provide a great returns experience becomes stifling. DIY and tool stores may not be in the most threatened demographics – clothing stores have that dubious honour – but are still at risk of falling short, especially in the periods after raised sales numbers.

Perhaps Imogen Shurey, founder of Velvet Cave, says it best in ParcelHero’s report:‘People are so used to being able to return things to big stores easily and often free of charge so it's difficult to compete. For a company with a huge turnover the money lost doesn't make an impact but too many returns could spell the end for a small business.’

For more information on the impact returns are having on businesses, read ParcelHero’s new report here: https://www.parcelhero.com/blog/marketplace/retail-returns-got-hand

Source: Insight DIY Team & Parcelhero

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23 January 2018