Payments typically flow from consumer to merchant, but in the case of merchandise returns, they flow the other way, and it turns out returns are an almost universal experience these days. That’s putting pressure on merchants to streamline the returns process and find ways to deal with consumer sensitivity about their personal credentials, according to survey results released Monday.
Some 82% of U.S. consumers returned anywhere from one to five items within the past six months, according to the survey from InComm Inc., an Atlanta-based prepaid card processor, which says it queried more than 500 consumers. And most consumers are thinking about returns even before they walk into the store: 55% said the retailer’s policy heavily influenced their decision about whether to buy from that store. Nearly all said the policy had some influence.
Still, in many cases, the return process turns out to be broken. Some 46% reported they were unable to do a return, usually because they lost the receipt or were past the store’s return period. At any rate, 69% of those who had experienced at least one failed return said the failure “was a main factor influencing future shopping habits,” according to the report. Forty-six percent reported the incident to family or friends or on a social-media outlet.
And now a growing sensitivity about the privacy of payments data is creating a further complication. Nearly all respondents said they had been asked at one time or another to show personal identification at the time of the return, with 58% indicating they had been asked for identification most or all of the time. Yet 56% said the ID policy “bothered” them, according to the survey.
Longstanding policies regarding IDs for returns could be thrown into a cocked hat as states start to legislate stricter controls. In California, for example, the Consumer Privacy Act will make it harder for retailers to collect this information to track product returns come Jan. 1, according to InComm.
“Retailers will have to rethink whether they should require personal identification in their return policies,” said Karl Denzer, senior vice president of emerging technologies at InComm, in a statement. “Rather than relying on monitoring customer information, merchants should consider leveraging anonymous product-tracking technology within their point-of-sale systems. This approach would help ensure compliance with privacy laws … while also facilitating a faster, more reliable return experience that reduces fraud.”
Regardless of legal complications, cash remains the favored refund currency, with 42% preferring it. A reversal to the card was favored by 35%, followed by store credit or gift card (13%) and an exchange (10%).