Will Amazon’s Warning About ‘Frequently Returned’ Items Make It More Popular Than Ever?
Amazon.com may have devised a partial solution to curb the amount of product returns it receives. The online giant has begun labeling products as “frequently returned” and advising shoppers to check item details and customer reviews before purchasing.
The news, first reported on earlier this week by The Information, comes at a time when retailers are looking for ways to reduce returns and boost their profit margins. Returns were a key topic of discussion at Shoptalk 2023, held this week in Las Vegas.
USA Today reports that Amazon uses the same methodology for its products and those sold by marketplace sellers in evaluating the return rates of products before they are flagged.
“We’re always innovating on behalf of customers to improve the shopping experience,” Amazon spokesperson Betsy Harden said in an email to media outlets. “We’re currently showing return rate information on some product detail pages to help our customers make more informed purchase decisions.”
Engadget speculates that Amazon is using the badges to pressure manufacturers and third-party sellers to address product shortcomings that lead to returns. Some marketplace sellers, however, say that the rates of return for goods sold on Amazon are higher than on other sites. They point to Amazon’s easy checkout, fast delivery and customer-friendly return process as promoting higher return levels.
Return rates across the retail industry soared with the start of the novel coronavirus pandemic with Americans ordering a greater percentage of the products they purchase from Amazon and other online sites.
Those rates have begun trending downward as concerns about COVID-19 have flagged and shoppers have done more of their shopping in stores.
Insider Intelligence forecasts a significant drop in online return rates in the future. Its research shows online return rates fell from 21.7 percent in 2021 to 18.2 percent this year. Return rates are expected to continue declining year after year to reach 14.7 percent in 2026.
Wendy Louie-Lam, forecasting analyst at Insider Intelligence, says that the return to stores is only part of the reason that return rates are coming down.
“The other reason is retailers are implementing new policies or AI tech to minimize returns,” Ms. Louie-Lam said. “Many online apparel retailers have implemented or are planning to implement new AI technology that should help with sizing to eliminate bracketing (people buying more than one size). Also, some online retailers are charging for returns.”