How extended return windows will impact fashion brands

In a move to keep customers loyal and adapt to changing times, brands across the fashion industry are extending return windows by 30 to 60 days, and in some cases, more.

With brick-and-mortar stores closed and communities dealing with shelter-in-place guidelines, it’s largely impossible to return items to stores, or through the post office or UPS locations. As a result, more brands are opting to extend return windows. Adore Me temporarily changed its policy from 30 days to 90. Direct-to-consumer bridesmaids dress company Birdy Grey updated its two-week exchange and return policy for all orders placed after March 20; shoppers can sent items back through May 31. Cuts, a premium men’s T-shirt brand, expanded its return and exchange window from 20 days to 60.

“People can’t really go to the post office right now, so we want to be really flexible with people. On the customer service side, we brought on two new [hires] in the U.S. to help with the increase in demand. People are asking questions like if shipping is delayed and if we are open. We’ve seen a 20-30% uptick in customer service inquiries over the last month,” said Steven Borrelli, CEO and founder of Cuts.

Returns are already a big challenge for e-commerce companies, known to have higher return rates than brick-and-mortar. Statista predicted returns would cost brands $550 billion by 2020. And, 41% of shoppers buy things online with the intention of returning certain items, according to Shopify.

Christi Campbell, head of the fashion, retail and consumer branded products team at national law firm Duane Morris, said companies that will win the most respect from customers are ones that aren’t setting hard deadlines for customers to return products.

“Brands that are doing it right right now are the ones saying we are going to extend the return window by 30 days after we reopen our brick-and-mortar locations. The ones not getting it right are going to extend the window by 60-90 days [from mid-March or early April].  Even after there is a reopening of stores, there is going to be a lot of fear among consumers to go out and go shopping,” said Campbell.

While building customer loyalty is key over the next few months, there are clear challenges for companies that decide to extend their return window — mainly the financial strain that could be put on the company.

“The brands that survive this and actually come out ahead may be the ones that take the biggest financial hit. But they’ll continue relationships with consumers, and that loyalty will outlast this crisis,” said Campbell.

Companies that do make the choice to opt for a return window on the longer side — say, 90 days or more — will have to deal with unsold inventory that will likely be out of season. Fast fashion companies will likely struggle the most here, as they operate under a quick turnaround to keep up with the latest trends, week-to-week.

“For the next 12 months, the biggest issue will be getting the merchandise mix back in sync. All the spring product will not be sold and winter goods may not have been cleared out. Summer goods that should be arriving now may not make it in for the summer season. Brands should focus on a strategy for getting the season mix right for next year and Q4 of this year. Those that can do that will be well positioned for when this environment changes back to some level of normalcy,” said Scott Carpenter, president of retail solutions at finance company Great American Group.

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