New ICSC Consumer Returns Data: Brick-and-Mortar Shopping Drives Lower Return Rate Than Online Shopping
ATTN: Retail/Real Estate/Business Editors and Reporters
WHO: ICSC
WHAT: Consumer returns data from online and in-store purchases and ICSC’s 2024 Consumer Returns Survey
WHEN: ICSC’s Consumer Returns Survey was fielded online between February 7 and February 9, 2024, and polled a demographically representative U.S. sample of 1,012 consumers about their motivations for returning items purchased online compared to in-store. As part of ICSC’s The Halo Effect III report released in December 2023, ICSC partnered with strategy and research firm Alexander Babbage to conduct a returns analysis on $848.1 billion of in-store and online spending in 2022 across 69 retailers and 2,103 stores.
QUOTE: “We have known for some time the value of brick-and-mortar to a retailer’s strategy. Our latest findings further prove this by showing that the return rate for in-store purchases is three times less than the return rate for online purchases. Additionally, consumers are becoming more mindful of changing return policies that result in fees and shortened return windows.”
– Tom McGee, President & CEO, ICSC
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RESULTS:
- The average return rate for online transactions is 15.2%, three times higher than the 5% return rate for in-store purchases. In other words, for every $100 spent online, an average of $15 is returned, while an average of only $5 is returned for every $100 spent in store.
- The most common reasons for returning online purchases are damaged item(s) (52%), item(s) did not fit (50%), item(s) was not as expected (42%), and the wrong item(s) was sent (37%).
- The online return rate was higher than in-store across all categories of retailers studied, though the gap was biggest for discount department stores, where consumers returned just 6.2% of items bought in stores compared to 33.2% of items bought online.
- For apparel retailers, consumers returned 22% of products they bought online, more than three times that of in-store purchased items (6.2%). ICSC’s survey found that 87% of consumers who overbuy online do so with apparel to try things on at home and return what they don’t want.
- 82% of respondents said that when shopping online, return policies influence whether they decide to purchase from a retailer.
- To combat the growing challenge and costs of returns, retailers are changing their online return policies, but they must be mindful of the impact on consumer behavior. If retailers charged a fee to ship back purchases made online, nearly three-fourths (71%) of respondents said they’d likely stop shopping online from that company altogether, while 6 in 10 said they’d likely stop shopping online with retailers that shortened the free return window.
- “Keep it” policies may be becoming more prevalent as retailers attempt to mitigate the additional cost of shipping back returned items. Sixty percent of respondents said they’ve been given a full refund and just told to keep goods they had purchased online.
- While stricter online return policies might drive consumers away from shopping online, it can drive shoppers to stores. 79% of consumers would be more inclined to visit a retailer’s store to make a return if they were charged for returning items purchased online, while 77% also said that they would visit a retailer’s store to make a purchase if they were charged for returning items online.
