Retailers’ wisest returns policy may be to tell clients ‘just keep it’

This ‘returnless returns’ strategy is increasingly common because, for lower-cost items, it is more efficient and cost-effective than the back-and-forth of returns. In a 2023 survey of more than 500 retail executives, 59% used returnless returns compared with only 26% the year before. 

But cost cutting is not the only benefit for these retailers, according to new research from the University of Notre Dame in the US. 

Returnless returns can increase brand support by fostering goodwill, according to John Costello and Christopher Bechler, assistant professors of marketing at the university. Their study, titled ‘Just Keep It: When and Why Returnless Product Returns Foster Brand Support’, is forthcoming in the peer-reviewed Journal of Marketing Research. 

They conducted multiple studies that showed consumers who are offered returnless returns are more likely to patronise the brand in future and share positive feedback – compared with others doing standard product returns. They found this to be true when several factors are in place. 

Support for the brand increases 

“Returnless returns increase brand support when proof of the problem with a product is not required, the decision is framed as specific to that consumer and situation, the brand provides a consumer or environmentally centric motive for the decision, and the brand suggests donating the kept product,” Costello says. 

Adds Bechler: “Surprisingly, we also find that increased brand support generated through returnless returns can sometimes be greater than the support generated when a consumer appears to be happy with a product and does not initiate a return.” 

The study explored two situations: Where consumers get to keep the ‘returned’ product plus get their money refunded; and when they keep the returned item and get a replacement item. The effects hold true for both situations. 

And, while a blanket returnless policy may appear more likely to boost brand support because consumers may feel they could be excluded by brands with a case-by-case policy, the study shows the opposite is true. 

“Drawing from our theory that offering returnless product returns boosts brand support because they increase brand warmth, we find that returnless policies implemented on a case-by-case basis are actually more effective for a couple of reasons,” Costello explains.  

“The consumer feels they are getting special treatment. Also, because they are getting human interaction rather than an automatic email, the customer feels additional warmth toward the brand. So, increasing the level of ‘humanness’ in digital interactions has proven beneficial.” 

In addition, suggesting that customers donate the kept product boosts perceived brand warmth and support, as does providing reasons that articulate the brand’s desire to put the customer first in their product-return processes. 

The findings offer important insights for firms that are designing or updating their product-return policies and would like to improve how they are viewed by customers who seek to return purchases. 

You can read more about the study here.