Package Return Impact on Online Retailers

As shoppers buy more things online during the pandemic, they also return more of their purchases at an all-time high.
Blog cover

Last update:

June 22, 2023

As shoppers buy more things online during the pandemic, they are also returning more of their purchases to retailers at an all-time high. According to the National Retail Federation and ApprissRetail. Sellers are facing greater challenges than ever before in terms of return costs.

The data shows that online shopping returns are at an all-time high, with returns jumping from 18.1% in 2020 to an average of 20.8% in 2021, exacerbating the financial burden on sellers.

Source: Pitney Bowes BOXpoll

These returns account for 21 percent of the average lost order value for U.S. online retailers, and there is also a wide variation in costs among the retailers surveyed, with many paying well above the median.

Vijay Ramachandran, vice president of global e-commerce marketplace strategy at Pitney Bowes, said, "Both retailers and consumers are struggling with returns because each side believes the other is making the process more difficult."

Seventy percent of retailers say they are actively trying to reduce the cost of returns by addressing shipping and/or processing costs. Meanwhile, three-quarters of consumers say their recent return experience was inconvenient. This means that brands have yet to find an effective balance between return convenience and cost.

Along with returns, consumer perceptions of the speed of delivery are changing. The survey revealed that.

  • In October 2020, consumers' definition of “fast shipping” was slower due to delivery delays caused by the pandemic.
  • By late April 2021, consumers' definition of “fast shipping” slowed further, with "fast" delivery times extending by about one-third in most categories.
  • As of February 2022, the BOXpoll survey found that consumers' definition of “fast shipping” remains slower than expected prior to the pandemic, with the current definition of “fast shipping” for all products generally at 3.1 days.

Rising shipping costs

With shipping costs on the rise, consumers are noticing the impact at checkout. For every category other than the minimum free shipping threshold, more than half of consumers say shipping costs are more expensive than a year ago.

As an e-commerce seller, there is no best way to reduce your package return rate in a short period of time, though. But with the right shipping tools, you can always find the most affordable shipping options.

ShipSaving can help you increase your shipping capacity by providing our powerful shipping software and making it easy for you to manage orders and save time and money on both domestic and international shipping.

Sign up for a free ShipSaving account to start saving today!

Written on:

April 18, 2022
< Back to Blog Main Page