What: Customers are increasingly looking at cross border options for cheaper prices, especially in Asia.

Why it is important: who should bear the cost of returns then, the retailer of the customer? Retailers face a complex balance between managing return fees and maintaining customer satisfaction in cross-border transactions. A significant portion of consumers, especially in India where 60% expect free returns, demand cost-free return policies. This expectation extends broadly across the Asia Pacific region, driven by a desire for a hassle-free return process. Despite this consumer demand, the Asendia’s Shipping and Returns report highlights a trend away from free returns due to financial unsustainability, with less than half of online retailers currently offering this service. Brands like Zara and Asos.com are pivoting towards charging for returns or using subscription models to offset costs. The introduction of return fees can potentially deter customers, impacting sales and loyalty, particularly in regions like South Korea, Switzerland, the UAE, and India, where there is greater acceptance of these charges. Retailers are exploring strategies to balance these dynamics by offering free returns on promotional items or during specific periods, and investing in technology to minimize returns and enhance shopping experiences. Furthermore, according to DHL’s Global Online Shopper Survey 2023, price incentives are a major motivator for cross-border shopping, with significant percentages of consumers in Brazil, Malaysia, and Thailand citing lower costs as their primary reason for purchasing abroad. Quality is another critical factor, particularly in Sub-Saharan Africa and the MENA region. Retailers also need to consider additional trust-building measures, such as ensuring well-packaged goods, transparent consumer policies, multilingual websites, and sustainability practices like carbon offsetting. These elements are essential for fostering consumer confidence in cross-border shopping, particularly in diverse markets with varying expectations on return policies.

How can retailers balance cross-border return fees and customer satisfaction?