Klarna flags power of online returns as customer acquisition and retention tool

84% of online shoppers would turn their back on a retailer after a bad returns experience, according to new research from buy now pay later specialist Klarna.

The company surveyed 2,000 consumers across the UK.

83% admitted to getting frustrated by retailers with inefficient returns processes, while 82% agreed that retailers in general need to improve their capabilities in this area.

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Some of Brits’ biggest frustrations stem from the inconvenience of slow, out of date or inflexible processes.

36% cited slow refund processes as the most frustrating element of returning items bought online.

Other frustrations include having to print off return forms when they don't have a printer (25%), the inconvenience of queuing to return at the post office (23%) and not being able to return items in-store that they’ve bought online (21%).

84%, meanwhile, were more likely to buy from and 86% more likely to come back to online merchants who offer free returns. 70% stated that if a preferred retailer stopped offering this service, they might not shop with them.

Alex Marsh, Head of Klarna UK, says: “Nobody wants to be out of pocket as a result of items they don’t even choose to keep, so it’s no surprise that slow refund processes are the top frustration factor when it comes to returns.”

“As reliance on returns grows, retailers need to ensure they’re offering a smooth, seamless process that meets the needs of today’s customers - considering everything from effortless logistics to flexible payment options. As our research suggests, those that fail to adapt will lose customers in the long-term.”

Natalie Berg, Retail Analyst and Founder, NBK Retail, comments: "Consumers often expect a returns policy to mirror that of delivery – fast, frictionless and free – but that's not always the case.”

She adds: “The pandemic has thrust the issue of returns into the spotlight, exacerbating the disconnect between the effortlessness of placing an online order and the inconsistent and often friction filled experience of making a return. Returns are fantastically out of sync with an otherwise seamless e-commerce experience.”

“As we reimagine retail for a post-Covid world, retailers must accept that returns are part and parcel of 21st century shopping and, if managed well, can encourage conversion and drive loyalty among their most valuable shoppers. Retailers can no longer afford to ignore the post-purchase experience."