Refund delays mean consumers spend less overall
Poor returns policies are a contributing factor for struggling consumers to slash their spending, according to new research from banking platform Tink.
Its poll found that 30% of UK consumers are spending less online because refunds take too long process, and they’re worried about their bank balance. Similarly, 52% say they’re less likely to shop with a retailer if a refund takes a long time.
That's a huge number of consumers who are potentially being lost to that retailer, and who might be keen to spend at a particular time, but can’t.
“This suggests that retailers are losing out on valuable revenue and repeat business as a result of lengthy refunds processes”, the report said.
Meanwhile, retailers are also anticipating a difficult year ahead, with many struggling to handle rising costs and falling sales. Some 40% of online retailers are focusing on cutting costs as a result of the current economic environment and 54% say they are, or expect to be, forced to stop offering free returns as a result of the economic climate.
Pain points for merchants include the cost of processing returns (43%) and the length of time that it takes for a customer to get their money back (40%).
Encouragingly, survey findings suggest that a significant number of forward-thinking retailers understand that getting refunds right is an essential part of improving the returns process for shoppers and merchants alike. Over a third (36%) believe that instant refunds would enhance the customer experience of returns while 32% feel they would ultimately reduce the returns cost to their business.
Tom Pope, Head of Payments and Platforms at Tink, said: “It’s clear that the UK’s online retailers are facing the twin challenges of rising costs and meeting consumer expectations when it comes to returns and refunds. As a result, they risk missing out on vital revenue and repeat business in an increasingly difficult operating environment.”
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