The Role of Politics in Dealing with Ecommerce Returns

 

Returns are something that every e-commerce business has to deal with. Research among companies shows that they see a role for the government in stimulating sustainable behavior among consumers themselves. The current law gives consumers many rights but not so much responsibility. Shouldn’t that be different?

Returns are a natural part of eCommerce. After all, if you can’t fit, feel or smell an item before purchase, then you should have the chance to return it if you don’t quite like it anyway. The consumer’s return rights are enshrined in law. So it’s not surprising that consumers are using it en masse. This is what retailers of hanging chairs are patiently dealing with as the hanging egg chair is now available to buy online. Luckily, the product is of good quality and is only getting very minimal returns.

This topic is popping up more and more often in the media. Do consumers possibly make use of their return rights very often and easily? What do online retailers think of this? What do they do about this themselves and what do they think is the role of the government? Reductify conducted research into this on behalf of the Ministry of Infrastructure & Water Management.

Distance Selling Act

The government has a role in the e-commerce market. It determines the laws and regulations that all players must comply with. In the field of returns in e-commerce, the so-called Distance Selling Act is in force. This regulates the consumer’s right to return goods with a purchase that has been made “remotely”, so for example via a website or by telephone. This is also called the right of withdrawal. This is European legislation that applies to all countries of the EU. Whether players also comply with this law is monitored in the Netherlands by the supervisory authority ACM.

How do online retailers see the return challenge?

Qualitative research among 16 leading online retailers in the Dutch market shows that they do not see the return challenge as much as a problem, but as something that belongs to e-commerce. The challenges that returns pose are therefore different for each player. For example, the ‘challenge’ is strongly product-dependent. In fashion, it is mainly due to the high return percentage (30-50%) and the challenge to resell the many returns as quickly as possible.

In consumer electronics, the return rate is very low (3-8%), but returns are expensive because it often takes much more effort to resell the returned products. Often the original packaging is damaged and needs to be replaced or offered as a ‘second chance’ product with broken packaging at a lower rate. The challenge here is much more in reselling the product and the high cost per return. Increasingly, not only costs but also sustainability play a role in the consideration of online retailers to make returned products saleable again.

 

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How do online retailers see the role of the government?

Online retailers see the returns as part of their commercial considerations. What service do I offer customers at what price? Do I make returns free of charge or do I ask for a fee? Am I lenient in accepting and reimbursing returned products strictly? How do I ensure that I can resell a returned product? Initially, online retailers see no role for the government in this.

However, if we ask more about where the challenge lies and we present some statements about what role the government could potentially play, we see that online retailers generally do benefit from certain government interventions. For example, in the field of communication to make consumers aware of the steps they can take themselves to shop more sustainably (online), or to prohibit the destruction of returned goods that are not damaged. Perhaps most importantly, retailers see a task for the government not only to protect the consumer’s rights in current legislation but also to anchor sustainability.

Distance Selling Act and Sustainability

Both online retailers and Thuiswinkel.org see that the Distance Selling Act is now outdated. This law is already about 20 years old when e-commerce was still in its infancy and the right of the consumer had to be well protected. With today’s perspective, one might wonder whether the return rights of consumers are not very broadly protected and in some respects seem to be at odds with sustainable consumption.

For example, it seems logical to anchor returns with a statement of reasons in the law, instead of returning without giving reasons. It is precisely the return reason that is important information that helps the online retailer improve its services and reduce its returns. Or, for example, trying out products during the return period. It would make sense to limit this trying out in the law for products with a hygiene component. Precisely these are the products that are unsaleable if they are returned to the retailer, think for example an electric toothbrush or a shaver. Refusing the right of return in the event of return fraud should also become possible.

In short, making the e-commerce market more sustainable also includes making returns more sustainable. Both the consumer and the online retailer and the government have a role in this. The government has the task of adjusting the legislation in the field of returns in e-commerce in such a way that sustainability becomes easier.