Free delivery and returned items

[imageonline]

We offer free 1st class uk delivery on all items to keep things simple for the customer.
Due to the nature of what we sell, fashion accessories, we get a lot of returned items (wrong colour match)

Sometimes customers order 3 or more items to select one good match, this increases our postage to insure goods.

Customer returns all items and we refund all money and loose postage.
It is the same if they order one item and it is not suitable.

We are very busy and loose over £50 a week in postage refunds.

How would you handle this problem?
A competitor offers free delivery but their t&c state postage costs are deducted from returned perfect goods, Is this fair?

Your thoughts please.

 

[That Guy]

I would just suck it up.

I think according to the Distance Selling Regulations a customer is entitled to a FULL refund inc Postage.

 

[WebWizard]

Or... Make rule refunds accepted but not on postage.

Alternative would be if you do refund shipping then deduct the cost you paid & refund what remains if any.

PS: to avoid this just dont have a shipping price, include postage into items depending on size.

 

[kulture]

Whilst what you are doing is within the DSR, and what your competitor is doing is NOT, I would be tempted to follow their lead.

Most reasonable customers would think that withholding your actual postage loss to be fair.

Please note however that in doing so you would be in breach of the distance selling regulations.

It is good to be busy. You should also take into consideration that your better service (re full refunds) is why you are busy.

 

[davek17]

Can you not take out a contract with a courier company which will make your postage and pickup costs a fixed monthly overhead?

I am pretty sure you do not have to refund postage if someone changes their mind on a product and you can in fact charge a restocking fee on top of that if you want to, although I would not want to comment on the nature of the fashion business by any means. I would think that to make it work you would have to offer free postage like you are doing?

 

[kulture]

I am pretty sure you do not have to refund postage if someone changes their mind on a product and you can in fact charge a restocking fee on top of that if you want to

No you are totally wrong. Why not look at the Distance Selling Regulations.

 

[scm5436]

You must refund the outgoing postage charge - or in your case not make any deduction from the refund - but if you put it in the T&C you can at least make them pay the return postage.

 

[Lime One]

I would simply increase the cost of all products as across the range if you are busy this is probably pence to stay both within the DSR and have lots of returning customers who see the service as better than the competition.

 

[Blagger]

If you are offering free delivery then how can you take out a cut if they return it. Wouldn't make sense.

I would either put something in your T&C's about a restocking fee or not offer free delivery and state postage costs are non refundable if product is returned and to be found non-faulty.

Depending on your profit levels is £50 a week really worth the worry?

 

[Dymo King]

I would either put something in your T&C's about a restocking fee or not offer free delivery and state postage costs are non refundable if product is returned and to be found non-faulty.?

Neither of these are allowed when selling to consumers, which the OP seems to be doing.

 

[UKSBD]

The best thing to do is make it as difficult and as expensive as is reasonably possible for the products to be returned, and make it clear in your terms and conditions that the customer pays all return fees.

This might deter people from sending back items unless they are 100% they don't want them.

I heard the moneysaving expert on the radio last week and he was as good as advising people to buy multiple products even when only wanting one.

If eeryone does this more it will make life even harder for small online retailers.

 

[Setfire]

I would take the hit - build it into your business model.

Making it as difficult as possible to return things will likely reduce your customer satisfaction, conversion rate etc. You want your customers to repeat purchase, tell their friends etc. Why upset them?

As has been said before, you are working within the DSR. I would put money on it that it will cost you more money to administer a surcharge scheme than you recover. Think about processing time, credit card transaction fees etc.

 

[UKSBD]

The OP is in fashion.
This thing the moneysavingexpert was talking about.

He says Mrs. moneysavingexpert now orders 10 dresses at a time when she only wants 1 and then sends the rest back.

Surely you're not saying that type of customer should be encouraged?

 

[Flying Hippy]

As long as the customer keeps part of the order you do not have to return the original postage costs.

 

[Setfire]

The OP is in fashion.
This thing the moneysavingexpert was talking about.

He says Mrs. moneysavingexpert now orders 10 dresses at a time when she only wants 1 and then sends the rest back.

Surely you're not saying that type of customer should be encouraged?

All customers should be encouraged.

The business model should take into account that some items will be returned; its inevitable.

Why alter the returns process to penalise all customers to take this minority into account? Make your returns 'no hassle' and you will get more sales and happier customers.

Of course, if you have individual customers who continually take the p***, you can choose to not sell to them in future.

 

[Cupidlingerie]

We get a fair number of returns, and also a fair number of customers who order two or more items so that they can choose one and return the others.
We always try to make our customers happy - and we get returning customers as a result.

The Consumer Protection (Distance Selling Regs) are very clear -
(i) if the entire order is returned, you must refund the full amount paid by the customer including the postage which you charged them.
(ii) if only part of the order is returned, you do not have to refund any of the postage.
(iii) if the customer is required to pay the return postage, you need to state this in your terms & conditions
(iv) You cannot charge a "re-stocking fee", even if you put it in your t & C

As for the "money saving expert", well so long as Mrs MSE keeps one of the items, a sale is still a sale. Of course, in the long run, internet shopping will just become more and more expensive as everyone adds on a bit more to their prices to cover the extra costs of shipping huge numbers of unwanted goods around the country, and the time involved in doing all the partial refunds. And then of course the banks will want an extra slice for all the extra processing etc etc. Perhaps not such a "money saving expert" after all

 

[scm5436]

The Consumer Protection (Distance Selling Regs) are very clear -
(i) if the entire order is returned, you must refund the full amount paid by the customer including the postage which you charged them.

And this is the important one - if they return part of the order then the DSR doesn't apply, so basically you can make up your own return rules (just as long as you follow the DSR if they want to return the whole order). Of course it may make your terms & conditions quite complicated if you basically have 2 sets of return terms depending on the circumstances of the return.

All customers should be encouraged.

OMG no! Some types of customers should be actively discouraged, and in some cases absolutely banned!

 

[Cupidlingerie]

And this is the important one - if they return part of the order then the DSR doesn't apply, so basically you can make up your own return rules (just as long as you follow the DSR if they want to return the whole order). Of course it may make your terms & conditions quite complicated if you basically have 2 sets of return terms depending on the circumstances of the return.

No, that's not quite right. If a customer returns part of an order, the DSR do still apply - but in such case the customer is not "cancelling" the contract, so the provisions relating to cancellation of contracts would not apply. There are also still plenty of other bits of Consumer Law which would apply - such as Unfair Contract terms etc.

Interesting point, though - could you charge a "re-stocking" fee if the customer only returns part of the order? If everyone starts following the "money saving" expert and orders 10 of everything, and returns 9, it may be a useful option to have it in your t&c's.

Unless it becomes a real issue, however, we will continue trying to keep customers happy - good customer service is important.

 

[scm5436]

No, that's not quite right. If a customer returns part of an order, the DSR do still apply - but in such case the customer is not "cancelling" the contract, so the provisions relating to cancellation of contracts would not apply. There are also still plenty of other bits of Consumer Law which would apply - such as Unfair Contract terms etc.

ok, but off the top of my head just about all of the 'bad' things about the DSR relate to the customers ability to cancel the contract within 7 days - so if they're aren't "cancelling" then bye bye "full refund including delivery", bye bye "don't need to return in original packaging / in resaleable condition" etc.

Can you think of any important clauses that would still apply?

ps. it's a pity we can't use the Unfair Contract laws against the DSR - it would tear it to shreds!

 

[Flying Hippy]

I am Interested to know why "money saving" expert thinks it is better to buy 10 of items. What is the reason for this ?

 

[Cupidlingerie]

ok, but off the top of my head just about all of the 'bad' things about the DSR relate to the customers ability to cancel the contract within 7 days - so if they're aren't "cancelling" then bye bye "full refund including delivery", bye bye "don't need to return in original packaging / in resaleable condition" etc.

Can you think of any important clauses that would still apply?

ps. it's a pity we can't use the Unfair Contract laws against the DSR - it would tear it to shreds!

Yes, obviously the main provisions which affect online sales are the provisions relating to the right to cancel. But there are other provisions in there which can be of importance.

For example, the provision which requires the contract to be performed within 30 days maximum.

Also the provision that requires the statutory information to be provided(failure to do so results in your customer having not just 7 days in which to cancel, but 3 months and 7 days - so even if your customer has only sent back part of their order you could still get the rest of the order back 3 months later!)

Also to provisions which allow enforcement authorities to take action against businesses which do not comply with the DSR.

I fully agree with you, however, that the cancellation rights are by far the most important ones.

 

[omnivore]

we are toying with the idea of free delivery and are emboldened by the info that when ASOS announced they were moving to free delivery in the uk earlier this year their share price immediately went up

so the big cheeses in the city all thought it was a very good indicator of future growth and profit

 

[Brasso]

I think That Guy is right, they are entitled under distance selling regs and you'll have to suck it up. I was in a meeting earlier this year and one of the consultants does work for boohoo. He said that they built in 25% returns into their business model and that most of them were not suitable for resale. They chucked them in a pile and sold them as a lot to a bloke who took them on a market stall. He also said that the worst place for bogus returns was Liverpool (just what he said)

 

[scm5436]

I think That Guy is right, they are entitled under distance selling regs and you'll have to suck it up. I was in a meeting earlier this year and one of the consultants does work for boohoo. He said that they built in 25% returns into their business model and that most of them were not suitable for resale. They chucked them in a pile and sold them as a lot to a bloke who took them on a market stall. He also said that the worst place for bogus returns was Liverpool (just what he said)

If you build 25% returns into your prices (ie. assuming that 25% of your stuff is going to be sold off for pennies in the pound to market trader merchants etc) and your competitors don't do that, then you are going to be wildly uncompetitive. And if you don't have some big brand name or USP to make up for it that is going to kill your sales...

 

[Brasso]

if you don't have some big brand name or USP to make up for it that is going to kill your sales...

I would think that if you are giving good deals on returns and your competitors aren't then your returns policy is unique. Since your returns policy is unique it froms part of your unique selling point (or USP).

The consultant also told me that boohoo got their big break during popstars the rivals, when the girl band went there to try on dresses. Their website crashed that night due to volume of traffic. I don't know the fasion business but I would think that it is all image and marketing and very little substance (as regards product cost). So if your product has a low cost then you can afford to get 25% returns, no?

 

[francsutherland]

Hi,
You could possibly absorb the £50/wk loss on postage returns by averaging this across your sales price. Your customers get the same straight-forward service and you don't lose out.
Hope this helps,
Franc.

 

[scm5436]

I would think that if you are giving good deals on returns and your competitors aren't then your returns policy is unique. Since your returns policy is unique it froms part of your unique selling point (or USP).

So you think people will pay an extra 20-25% just because you have a good returns policy? That's only going to encourage the wrong kind of customers...

The consultant also told me that boohoo got their big break during popstars the rivals, when the girl band went there to try on dresses. Their website crashed that night due to volume of traffic. I don't know the fasion business but I would think that it is all image and marketing and very little substance (as regards product cost). So if your product has a low cost then you can afford to get 25% returns, no?

Sure, if you have a unique product with a low product cost then you can have huge markups - just like the catalogue companies. But if you're selling off the shelf branded goods you have to be competitive - and there are lots of idiots out there selling for crazy low prices which drags the prices - and margins - across the marketplace.

 

[UKSBD]

The Money Saving Expert was also talking about bricks and clicks set ups, where the big High street stores are coming more and more online and combining the 2.
i.e.
People can, shop in high street or online, buy online, but return items to local store (if they want to).

This is probably the single biggest challenge to the small online retailers who have had it so good for the last 10 years.

Is the begining of the end for the online micro businesses?

 

[patrick47]

I would either forget about it, (surely £50 isnt something to lose sleep over), or add it in your item cost. Its simple, £50 is 500 10p's. Lets say you sell 1000 lines, add 5p onto each item.

Or if you have 5000 lines, add 1p, so take your items which are .99 and round them up, simples.

 

[UKSBD]

I would either forget about it, (surely £50 isnt something to lose sleep over), or add it in your item cost. Its simple, £50 is 500 10p's. Lets say you sell 1000 lines, add 5p onto each item.

Or if you have 5000 lines, add 1p, so take your items which are .99 and round them up, simples.

The postage cost is only a small part of it.

On a £100 product it might only cost a couple of pound for the delivery, but what about the fact that the product shouldn't really be sold as new once it has been returned.

It makes that couple of pound delivery charge look insignificant.

Tescos even have their own ebay store for selling returned items
http://stores.ebay.co.uk/Tesco-Outlet/About-Tesco-Outlet.html

 

[Flying Hippy]

I think what people are forgetting is an average item of clothing can be over £41 = £5.95 special delivery for 1 item

i.e original item cost £20 + Vat = £23 cost to you sell for £39 - Vat = 33.19
then your tax on this at end of year - £5.95 delivery = loss

customer gets lazy and returns with normal 2nd post = lost item = dispute