Retailers offer special returns policies to their best customers, Narvar study finds

Staggered by the spiraling costs of e-commerce product returns, retailers are rolling out creative solutions such as offering favorable terms for their best customers, according to a market study by supply chain software company Narvar.

In contrast to their published returns policies, some retailers are also offering VIP policy options such as “keep the item,” which provides a refund without requiring the item to be shipped back to the retailer at all, San Mateo, California-based Narvar said in a returns benchmarks report released today.

“The current status quo of one-size-fits-all return policies — and the trend toward free returns, no questions asked — is not a feasible long-term strategy,” Narvar said in the paper. “We believe that the future is differentiated, with retailers personalizing their returns experience based on customer personas ranging from those who are outright fraudsters to your most loyal VIPs.”

Narvar captured its research through an online survey conducted in July 2021 spanning 1,020 U.S. consumers who had returned at least one online purchase in the last six months.

It found that retailers can mitigate their operational costs by reserving the most valued benefits to reward their highest value customer segments. For example, some companies offered longer return windows for repeat customers, such as Home Depot (365 vs. 90 days), Target (120 vs. 90 days), Best Buy (30 vs. 15 days), and DSW (365 vs. 90 days).

In a twist on that approach, other companies offer free shipping for a limited time as a reward to encourage customers to send in their returns faster or to accept store credit instead of a refund. Examples include Lulus (free returns for 10 days, $7 after), Saks Fifth Ave. (free returns for 14 days, $9.95 after), and thredUP and Dollskill (both offering free returns for store credit).

A third option is simply telling consumers to keep the item and avoid incurring return costs at all. Narvar said some retailers extend unpublished “keep the item” offers to their best customers, citing: Amazon, Walmart, Target, Wayfair, Chewy, Wish, Kohl’s, and Shein. According to the researchers, that approach builds loyalty among repeat customers, who appreciate that it saves them time and effort.