The news that Asos is to charge some of its customers £3.95 for returns of items that result in the value of affected orders falling below £40 once the price of returned items is deducted has hit the headlines. Inevitably, there has been a backlash from customers claiming poor fit and related sizing issues, but the provision of an unrestricted free returns policy simply makes no sense for the businesses subsidising it.
Most sector businesses which have offered free returns now admit that having a free-for-all policy has cost them dearly. It has resulted in quite significant numbers of customers abusing the concession as a ‘right’ and it is this core of ‘customers’ with an above average returns rate which Asos is now targeting with its new policy. ‘Customers’ who rarely retain many, or indeed any, of the items ordered whilst costing Asos dearly.
Asos has said that it is making the change in to be able to continue to offer free return to all of its customers. As a further concession Asos ‘premier customers’ get free returns when they keep a minimum of £15 of their order.
Customers in France, Germany and the USA also face the threshold, in fact it was introduced in these territories earlier this year.
Amal Ahmed, director of financial services and EMEA marketing at Signifyd argues: “This situation highlights that returns are not ‘one size fits all.’ Penalising customers for high return rates can harm brand reputation and customer loyalty. Instead, retailers need a more nuanced, data-driven approach. Machine learning and AI can help differentiate between genuine returns and fraudulent activity, ensuring that good customers are not unfairly targeted. Our findings also indicate that return behaviours vary widely, from bracketing (buying multiple sizes to find the right fit) to changes driven by flexible payment methods like Buy Now Pay Later.”
However, with margins under pressure, as they surely are in the current environment, all retailers need to ensure that they have sufficient focus on all aspects of returns and their related costs. Asos is clearly working hard to introduce tighter controls in a highly competitive segment of the business that is often targeted by consumers who frequently order multiple items to fuel their personal social media output, returning all items—only to repeat the process again. This is not fraudulent per se but disingenuous and costly.
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