Retailers stuck with ‘unsellable stock’ after granting high volume of returns

Retailers are ‘struggling to cope’ with the volume of refund requests they feel obliged to grant, despite items being unfit for resale.

That’s according to new research from Barclaycard which claims retailers are stuck between accommodating shoppers’ demand and balancing their bottom line, with almost six in 10 (57%) giving refunds regardless of product condition in a bid to maintain a positive relationship with customers.

Not including faulty or damaged stock, merchants estimate that a quarter (29%) of goods refunded are unfit for resale.

The research said this is resulting in stockrooms filling with unsellable items, including products which have clearly been used (48%), ar marked (29%) or have parts missing (28%).

Accepting that the issue is not going away, a fifth (22%) of retailers said they have introduced a new system to dispose of stock they cannot resell. One in ten (11%) have partnered with a reseller to resell items on at a loss, and such is the volume of stock that 8% have even moved to a bigger warehouse to store unwanted goods.

Meanwhile, some retailers said they opted to restrict their policies in a bid to cut the level of returns, particularly for online purchases.

Driven by the buy-and-return habits of so-called ‘serial returners’, almost four in ten (37%) merchants admit that they do not offer free returns as a way to discourage shoppers from returning non-faulty items. A further 12% have stopped offering this service because it became ‘too expensive’.

Over a third (36%) of consumers claim they would be put off shopping somewhere if there was a charge to return items by post or courier, making this more important to shoppers than quick delivery (15%) and lack of online customer support (18%).

Sharon Manikon, customer solutions director at Barclaycard, said: “In the 21st century, where we can buy as much as we please at the touch of a button, shopping is no longer just a necessity, it’s a well-loved hobby.

“Retailers are faced with the difficult task of ensuring they can manage the influx of returns which comes hand-in-hand with online and impulse shopping, without compromising their bottom line, or their relationship with customers.”

She added a good returns policy can help retailers attract and retain customers, but it’s “crucial” that retailers are clear on when customer can and can’t return items to limit the amount of unsellable stock.