March 24, 2023

Resale + Tighter Returns Policies = Win / Win

Photo by Etienne Girardet on Unsplash

We know that returns are a problem. Fortunately, it seems that an increasing number of brands are beginning to do something about it by tightening their return policies. Some brands are choosing to shorten return windows, or add restocking fees.

However, for many brands this is still an anxiety-inducing topic. They fear that the mere perception that they are taking away a benefit from shoppers would be enough to discourage those shoppers from buying. This concern may have some merit, especially when the change in policy is presented on its own without an alternative.

Offering a resale marketplace alongside tightening return policies solves this problem.

This approach is a winning strategy for brands and shoppers. On the one hand, brands can reduce their costs and environmental impact while maintaining customer satisfaction. On the other, shoppers are empowered to make more sustainable choices while also having access to an alternative option when making a return is no longer available.

Returns are costly for brands in terms of logistics, lost revenue, and the need to dispose of or discount returned items. Additionally, most returns are not due to due to customer preferences, such as fit or style. By tightening return policies, brands can reduce these costs and encourage customers to make more thoughtful purchases.

However, tighter return policies could also lead to customer dissatisfaction. By providing a resale marketplace for customers to resell their unwanted items, brands can offset the impression that they are taking something away with the sense that they are offering a new benefit. This is a particularly effective strategy when sellers have the option to redeem their sales proceeds in gift cards because an unwanted item ends up with someone who wants it, and the sellers get to buy something new. A resale marketplace turns a negative into an opportunity to build customer loyalty and encourage sustainable consumption.

Thinking about this a different way, it is better to provide shoppers an alternative than to simply decline the return. When a brand might have otherwise had a customer who is dissatisfied by the inability to make a return, by offering the resale option instead, it can offer the customer a viable option. And since the marketplace is specific to the brand, sellers are much more likely to find a buyer for their unwanted products than they would in a general marketplace because that marketplace caters only to people who prefer this brand. The private marketplace approach makes this option much more likely to be accepted by customers.

In conclusion, offering a resale market alongside tightening return policies can be a winning strategy for brands and shoppers. Brands can reduce costs and their environmental impact while maintaining customer loyalty, and shoppers benefit from a sustainable alternative to returns outside the new policies. By putting these strategies to work together, brands can begin to reduce the harm of returns, and shoppers can choose a more sustainable option.