Should Retailers Embrace ‘Keep It’ Return Policies?

Should Retailers Embrace ‘Keep It’ Return Policies?

‘Keep It’ return policies offer convenience to customers.

Returns have long been a headache for retailers, but a new approach is gaining traction – the ‘Keep It’ return policy. Unlike traditional policies, ‘Keep It’ allows customers to keep the item and receive a refund or credit. ‘Keep It’ policies prioritize customer convenience, especially for low-cost items, with 27% of surveyed retailers deeming products priced up to $20 suitable for “returnless” returns. According to The Street, 59% of retailers surveyed are now offering “keep it” policies, an increase from 26% in 2022. This strategy can be a win-win for both retailers and customers.

Finding the Balance

‘Keep It’ return policies often require a reevaluation of product pricing models as these policies involve absorbing return costs. Products prone to high return rates or shipping damage may require conservative pricing strategies, while lower-cost items offer flexibility to absorb return costs without sacrificing competitiveness. Adapting pricing structures is essential to strike a balance between offering customers convenience and avoiding incurring additional costs.

Cost Savings

The increased use of ‘Keep it’ policies is a response to the escalating costs tied to online returns, with the cost of processing a return reaching as high as 39% of the original price. ‘Keep It’ policies eliminate these costs, allowing retailers to redirect these resources.

Instant Refunds or Credits

This immediate reimbursement provides a positive experience for customers, reinforcing their trust in the retailer. It also accelerates the buying cycle, as customers can quickly reinvest their refunded amount into new purchases. This feature contributes to customer satisfaction and promotes repeat business, as customers are more likely to return to a retailer that values their time and promptly addresses their concerns.

Builds Trust

Studies highlight that customers appreciate the trust expressed through ‘Keep It’ policies. In fact, 90% of respondents who received this perk had previously shopped with that retailer, underlining the positive impact on customer loyalty.

While concerns about potential policy abuse leading to price increases for all persist, retailers adopting ‘Keep It’ policies face the task of maintaining customer trust while preventing misuse. Although this policy is not ideal for every product, finding the right balance and properly embracing such policies can provide a competitive edge and foster a customer-centric reputation.