Banning customers for serial returning?

May 24, 2018

Can you, as an online retailer, ban customers who have been returning their purchased items too many times? Well, it looks like you can if there is a valid reason. New evidence confirms that Amazon is taking this drastic step to counter return-happy customers, as reported by the Wall Street Journal.

Banned without warning?

In an email, customer Nir Nissim, was informed that he could no longer “open a new account or use another account to place orders on our site”. The 20-year old claims he had returned just one item this year—a computer drive—and four items last year. Nissim says he now has $450 in Amazon gift cards he can no longer use. Another customer was banned from using Amazon after returning “like 6 purchases in the last year”:

Another customer tells the Wall Street Journal that she spends thousands per year on the retail website; admitting to occasionally ask for a refund. But she did not expect her behaviour to lead to a ban caused by “an unusual number of problems”, especially considering how much she buys in total. No warning for an upcoming ban was issued.

Reasons for a ban

The Wall Street Journal tracked down some experts and ex-employees to find out the reasons behind the bans. These include “requesting too many refunds, sending back the wrong items or violating other rules, such as receiving compensation for writing reviews”. One simply stated that “creating a lot of headaches for Amazon” will potentially get you banned. How do they cause headaches? Well, for example, repeatedly giving a ‘typical’ reason for returning your items (e.g. “did not arrive as described” when they just do not like the item) will see you flagged.

Amazon reacts

In a reaction, Amazon says: “We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time”. Following abuse, the company takes “action when appropriate to protect the experience for all our customers”.

On the blacklist?

Returns-happy customers are a growing issue for online retailers and have long been a topic of much debate. Not just at Amazon. In Europe, fashion brand Esprit caused some commotion in 2016 by banning customers with high returns percentages. There have even been rumours about retailers building a collective ‘blacklist’ of serial returners. Luckily – for European consumers at least – legislation makes such blacklists hard to maintain, as consumers should be clearly explained what gets them on a blacklist, and how they can get off again.

Smart move, of a step too far?

The closest thing to such a blacklist is offered in the US by company ‘Retail Equation‘. The data firm tracks return behaviour for retail giants including Best Buy and JC Penney, resulting in consumers’ returns-risk scores. A clever move, or a step too far in an age of tightening privacy protection?

Can we do something before it is too late?

Luckily, there is hope for retailers who want to take action before it is too late. A recent study of 651.658 online orders suggests there are certain buying patterns that signal a return might be coming back soon. Also, taking small measures such as including freebies might see your return rate drop significantly. The core conclusions from this study:

  • Double-check with customers who order multiple sizes of the same item. Is it a mistake? Do they really need it?
  • Use discount vouchers to reduce returns. As little as a 4% discount can lead to a sharp decrease in returns.
  • A small gift goes a long way: the study found an 8.1% drop in returns for orders that included a freebie.
  • Carefully look at payment via invoice. While this might boost sales, it is also connected to a rise in returns. Consider disabling this payment method for those who often return items.

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