Can product returns actually make you money? That’s a question that has been asked time and time again by online retailers with no real answer in sight until just now. We’re here to help you better understand whether or not offering hassle-free returns can make you money by breaking down the logistics of it all so you can better understand.

The best way to answer this question is to look at statistical data that can help answer can product returns make you money. In one study that was covered by the Wall Street Journal, it was found that product returns can in fact make you money.

The study used six years of data that was culled from a large, nationwide retailer to help better illustrate whether or not there was profit that could be derived from offering free return shipping and no restocking fees. The results concluded that a return rate of 13% can help e-retailers profit from offering free return shipping.

It was also noted that items that were being sold for a discount had a lower rate of returns, whereas items that were being sold from new distribution channels had a higher rate of return. In summation: the report concluded that returns can make you money when your verticals are properly aligned in an omni-channel selling environment.

Large Retailers Set the Standard

Some retailers actually use free returns as the basis of their core marketing strategy. This is because they know that customers want a simpler shopping experience online. Studies have found that customers want returns to be as easy online as they are locally. But if you take returns and make them even easier with online shopping, it is more likely that consumers will simply choose your destination over a local store because they can more conveniently place an order.

Stores like Zalando and Zappos, two large footwear and clothing retailers, say that their return rate is a healthy 50% and they wouldn’t do anything to change that. This is because their most loyal shoppers make the most returns but also purchase the highest value products.

“A world without returns would be nice, but it’s unrealistic. For us, the question is: can the business be profitable with returns? And we are certain that we can. And to end the discussion, I will tell you: the overall return rate for Zalando is 50%,” says Rubin Ritter, managing director of Zalando.

Easy Returns Increase Profits

In a Daily Science report, it was also found that this notion is true. In a related study, researchers examined data from two large retailers over six months and more than 500,000 transactions that were split into control groups. The control group that offered free return shipping resulted in generating over 25% more in revenue than any other control group.

The convenience of hassle-free returns is something that most consumers have come to expect from online retailers. According to UPS, 81% of consumers are not likely to shop at a store that does not make returns simple and straightforward. And, over 65% of people read your returns policy before they make a buying decision.

Want to Offer Automated Returns At Your Online Store?

Take a look at ReadyReturns, a plug and play solution for your online store. Simple setup takes minutes. Now your customers can return a product in just a few quick steps. ReadyReturns tracks the progress of the return, keeping you updated on important analytics so that you can learn why products are being returned and make changes before you lose customers. Start your 30-day free trial now and offer better returns today!