Boyer's research examines Internet retailer's ability to handle holiday returns

Ken Boyer

Returns are an unfortunate reality in the world of Internet retailing, and they become an even bigger headache immediately following the holiday season. Estimates put the percentage of items purchased online that get returned at 5 to 20 percent, meaning that retailers will have to handle between 10 million and 30 million return transactions from holiday sales during the period December 26 - January 26.

Ken Boyer, Associate Professor of Marketing and Supply Chain Management and Director of the Last Mile Supply Chain Center, led a study of 464 customers who had returned one or more items to one of five different Internet stores within the past two months. He found that making the return process easy and straightforward is critical to building and maintaining customer loyalty.

Specific statistics drawn from the study include:

• The time spent by customers in preparing an item(s) for return, contacting the company and sending the package averages 27.2 minutes;
• The average time for customers to obtain confirmation that the company had received their package ranged from a low of 2.51 days to a high of 6.84 days;
• There is a strong relationship between the time it takes customers to return an item and their satisfaction with the process - the longer it takes, the less satisfied they are;
• There is a very strong relationship between customer effort and the likelihood of that customer making future purchases from that retailer - when less effort is required in making a return, customers are much more likely to make future purchases.

"The results of the study clearly show that retailers that handle returns smoothly and make the process relatively easy gain business in the long run," says Boyer. "Companies should view returns as a key component of marketing to the customer rather than as an annoying disturbance in the supply chain."

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