Consumers are used to generous product returns online. It makes the purchase decision simpler. Most companies restrict these policies to standard products, and custom products are not returnable. The authors argue that this is a mistake. Extending easy returns to customized products will encourage consumers to engage more with the brand and will also reduce the likelihood of returns occurring in the first place. More loyal customers and higher profits will result from this. The authors looked at the conditions under which companies can expect a win-win outcome if they adopt a policy of less returns. Four factors seem to be critical: making customized products more salvageable; adopting tech innovations that reduce the cost of customization; reducing or eliminating customization fees; and providing improved, user-friendly interface.
Product returns are booming. In 2020, consumers returned $430 billion in merchandise to retailers, which is about 10% of total US retail sales. The increase in online shopping during the Covid-19 pandemic has led to a doubling of online purchases' returns to 30% on average.
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