How To Decrease Product Returns

Retailers, manufacturers and consumers can work together

With wholesale shipments expected to eclipse $190 billion in 2011 and ownership rates of several key consumer electronics continuing to climb, the CE industry continues to be a bright spot in an otherwise gloomy economy.Despite high unemployment and waning consumer confidence, shoppers are still buying smartphones, high-definition TVs and tablets at a high rate.

Despite the increased demand for electronics, product returns remain a factor that eats into manufacturer and retailer margins.CEA’s recent research study, “CE Product Returns (2011),” takes a look at the current state of CE product returns, comparing historic rates and offering solutions on how sellers of technology can proactively prevent returns.

CEA estimates that 18 percent of CE product purchases are returned annually (this includes video, audio, computing, and communication electronics), which about equals 2009’s estimate. CE accessory returns have also remained unchanged since then. But despite that flat rate, the amount of consumers has grown along with the selection of CE products on the market.

To develop strategies that help manufacturers and retailers better handle product returns, it is important to understand why consumers made the returns in the first place.When CEA asked consumers the top reasons prompting their most recent return, four in ten (43 percent) replied the product did not “work as expected” with slightly fewer (38 percent) saying the product broke while in use. These findings are indicative of device performance not matching the consumer’s original expectations.Education on the set-up process, compatibility with other devices, and expected performance are some of the most important steps sellers can take to minimize product returns.

Some people may question if product returns impact consumer perceptions of a retailer or manufacturer. Though some consumers may go through a short period of dissatisfaction as a result of a product return, their feelings generally do not dissuade them from making a repeat purchase.When asked how likely they would be to buy the same brand again, nearly two in three (64 percent) recent CE returners said they would buy again and a similar number (69 percent) indicate they would buy the same product.Returners are also likely to shop the retailer they bought from again with eight in ten (82 percent) indicating their willingness to shop at the same retailer.

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  • Skip

    If 4 in 10 said the product didn’t work as expected, but 2 in 3 said they would buy the same product again, there is a credibility gap. Thirty-eight said the product “broke.” Hmmm. (I was using a hammer and a screwdriver to open the little compartment thingy when…….)

    I expect that gap could be filled by a technician-assisted delivery/install. Most people aren’t going to own up to the fact that the product is smarter than the human trying to make it work. Nor are consumers going to take the time to sort through the already highly-charged clutter in stores to “learn” (and remember) correct operational procedures. You can print it in letters a foot high, and the vast majority will simply not see it.

    Selling the install at POS or checkout might go farther to alleviate returns than attempting to educating consumers. Even in the 21st Century, you can still lead a horse to water, but……..

  • Tara

    Lets take a realistic look at this. If these stats really mean something–if you add all the percents up you get well over 100% with no explanation as to why and I honestly think the categories of better retail support and better instructions from the retailer are the same thing. But lets just say 61% of returns were because a customer wanted a "better working product"–which BTW is a really watered down way of putting it. Perhaps the answer then is in how the products are being designed and manufactured. Electronics are different these days. They used to last around 8-10 years, they are now literally made to break down in 2 years. You can’t make as much money if products don’t have to be replaced. So it probably stands to reason that more products are going to be defective at the get-go. This article didn’t really offer anything profound or anything people don’t already know, the writer just appears to have an agenda to not blame the real issue and didn’t do it very well at all.