Handling returns is the most difficult part of an eCommerce business. Returns result in online retailers losing large amounts of money and contributes billions of pounds of waste to the environment.
According to Invesp, a software provider for eCommerce website conversion optimization, at least 30% of the total products purchased online are returned compared to only 9% in brick-and-mortar stores.
Forrester Research estimates eCommerce will see $207 billion worth of returns this year. To reduce the impact of returns on its profits, Amazon has partnered with different establishments like Kohl’s where customers can drop off their returns for free. This win-win setup allows Amazon to save money on its delivery personnel, while its store partners could benefit from increased foot traffic and sales.
What’s more, Amazon will attract more customers to its marketplace as 62% of shoppers are drawn to online stores that allow them to return an item in-store, according to Invesp’s statistical data.
In protection of the environment
Aside from shielding its profits from serial returners, the online retail giant also aims to protect the environment from unused inventory.
Returned products used to be a big problem for Amazon as they only add up to existing superfluous stock that eventually ends up being thrown away. To stop this cycle, the company launched the FBA Donation Program last month, allowing online sellers to donate their excess stock in any Amazon U.S. fulfillment centers to charity.
Amazon said the program doesn’t only help reduce the number of products sent to landfills but it also helps those in need.
Some items that have been returned to Amazon are bought by third-party companies, repackaged, and sold on their own platforms for profit.
The retailer also reworked its packaging to ensure it doesn’t cause any harm to the environment. For more than 10 years now, it has been using 100% recyclable plastic mailers instead of cardboard boxes. By doing so, it has eliminated 244,000 tons of packaging materials and 305 million shipping boxes as of December 2017.
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