(NewsNation) — The era of free returns may soon be going by the wayside, as a growing number of retailers are adjusting their policies that customers have grown accustomed to.
Macy’s, Abercrombie, J. Crew and H&M are among the companies that have added shipping fees for mail-in returns, CNN reported.
According to Happy Returns, 81% of merchants started charging for at least one return method in the last 12 months, “predominantly to help reduce return rates.”
Retailers are increasingly looking for ways to save costs, a strategy that may come at a cost itself.
One survey conducted in November found that 48% of consumers returned at least one gift last year, and 40% said they’ll return at least one or more gifts this year. Almost a third (31%) said they were specifically making returns part of their shopping strategy.
CNN reported that companies have to cover shipping costs to process the returns, and products often end up in retailers’ warehouses or back on store shelves at a discounted price. Products may also end in liquidation warehouses or landfills. All of it reduces a company’s bottom line.
To mitigate costs, businesses may turn to artificial intelligence to help cut off these kinds of returns before a shopper even checks out.
A McKinsey study found that 70% of the returns in fashion categories are due to size, style and fit issues. AI technology could be used to improve recommendations at the point of sale, RetailWire reported.
The idea is to deploy AI for a better, more sophisticated shopping experience so people can ensure items fit and look how they like before adding them to their cart.
MySizeID, Volumental and ShoeAI are all helping online retailers find the right products for consumers, according to RetailWire. Stitch Fix uses an AI-driven algorithm to create product recommendations, while Amazon and Shopify have also used AI tools to reduce returns.
Reverse logistics can be expensive, too, as explained by SupplyChainBrain.
“One of the biggest factors is that the current supply chain is only efficient in one direction, and problems start when attempting to move goods backwards,” contributor Heather Hoover-Salomon wrote.
While outbound shipping may be streamlined, “returned goods are hardly as uniform.”
“Retailers have to manually inspect each item before restocking, as many will not be returned in a condition good enough to resell,” Hoover-Salomon wrote. “Larger goods, particularly furniture, are nearly impossible to restock after assembly, with a recent survey showing 68% of returned large items fail to recover at least 50% of their original sale price.”
AI may be a solution here as well.
“One of the biggest reasons reverse logistics is currently so expensive for retailers is that very little of the process can be automated,” according to SupplyChainBrain. “This is what differentiates the cost of normal shipping from returns, and should be the first priority for supply chain experts analyzing how to solve retailers’ return woes.”
