Peak season conjures up chaos for retailers and their customer service teams. Yet despite this, returns are often an afterthought in peak season planning.

By failing to forward plan, retailers miss opportunities to ease the burden on customer service teams, stress-test their returns policies, and even boost acquisition, says Al Gerrie, CEO at ZigZag.

Returns volumes have been growing by around 5-10% each year, putting significant strain on retailers’ ability to provide an adequate standard of service at the busiest time of the year.

Last minute returns planning is stressful for customer experience teams and leaves retailers unprepared to deal with the most busy returns period of the year, meaning they won’t have the most efficient, customer-friendly policies in place.

Returns left by the wayside

Retailers recognise the scale of the issue but few are acting. An overwhelming 86% know they would benefit financially from finalising a returns strategy earlier in the year and 73% can’t find the time to prioritise planning before peak. Despite this, 43% are wrapping up strategies in Q3 or later. 

It’s not like this is the industry’s best kept secret either – a vast majority cited late or poor returns planning as the cause of missed revenue (86%) and unnecessary operational challenges (87%) during peak. Nearly half (49%) of shoppers have cancelled purchases based on the returns policy alone, so the consequences of waiting are high. 

Businesses pay the price for bad CX

Rushed returns strategies cause an operational nightmare that spills over into lost sales and disgruntled customers. Delays (39%) are, as you might expect, the most common disruption. But poor planning is also driving up return rates for over a quarter (27%) of affected retailers as unclear, untested policies cause confusion for those taking advantage of peak season sales.

Crafting a policy that works takes time and A/B testing is an effective route to the right solution. This means testing policies and returns methods on different segments of your customer base to prevent the vicious cycle of late returns planning causing more returns. 

Peak becomes gridlock when return rates rise. Delayed planning causes avoidable pressure for 81% of customer service and operations teams, rising to 97% for smaller businesses with fewer employees to process the deluge of complaints. Solidifying strategies no later than Q2 saves the time and effort spent dealing with requests that most retailers fail to anticipate. 

Long-term loyalty

Despite a clear financial incentive, retailers’ time is short and returns aren’t prioritised until it’s often too late. The most common reason holding them back is a lack of clarity on the return on investment they’d see. As a result, only a sliver is taking advantage of the money left on the table.

Almost all retailers (99%) have been considering an alternative returns method ahead of this peak season. 71% of customers spend more than the gift card balance when making the next purchase after a return and those that opt for a store credit refund spend 47% more than the gift card balance on their next purchase. 

Tacking on these options as a ‘Hail Mary’ just before peak is not the way to maximise return on investment. Testing paid returns before such a crucial part of the year means retailers can enter peak knowing how well-received methods like gift cards and store credits are, improving the prospect of short-term sales and long-term loyalty. Having a system already in place by peak allows teams to operate with confidence and familiarity with the system. Less pressure means fewer mistakes, and customer service outcomes that keep first-time customers coming back. 

Get Returns Ready 

Early returns planning is a gold mine for retailers that struggle when peak season hits. Huge cost savings, opportunities to land new customers and chances to ease the burden on customer support teams are being missed because it’s difficult for retailers to justify before the second half of the year.

We commissioned this research to prove to retailers that if they feel they’re finalising their strategies too late, they probably are – but so are many of their competitors. Getting ahead with a comprehensive plan is the route to a more positive customer experience and the financial rewards that come with it.