Online Sales vs Online Returns

Online sales vs online returns
How are online returns reconciled with store sales?

8 January 2018, by Savills Research

Nearly half of stores refund online returns



Refunds for online returns can be an issue at store level from both an administrative and financial perspective, as they require staff resource to deal with (removing sales staff from the shop floor and thus affecting the service provided). Additionally, online refunds are often deducted from a store’s bottom line.


Are online returns refunded in-store?

Figure 4

Source: Savills Research

Overall, nearly half (48%) of stores refunded online returns. 9 out of 10 Footwear stores refunded online returns – the biggest category – followed by Stationery (85%) and Womenswear (82%). Both Footwear and Womenswear have struggled in the last year, in part due to the competition posed by online retail. It is therefore ironic that stores in these categories are among the most likely to refund online returns.

Fast Food / Takeaway and Cafes were least likely to refund online returns – however the ability to replace a cup of coffee that has been returned with another is probably easier and has less impact on a store’s sales than replacing a pair of shoes.

There was little difference from a regional perspective with South East stores most likely to refund online sales (52%) and North West stores least likely (45%).


Are online returns deducted from your sales figures?

Figure 5

Source: Savills Research

Stores are nearly twice as likely to have an online return deducted from their P&L than to be credited with an online sale

Figure 6 shows the differential between online returns deducted from store sales and online sales credited.

On average, stores were 1.6 times more likely to have online returns deducted from store sales than to be credited with an online sale in their region.

The category with by far the greatest disparity between online sales credits and online return deductions was Accessories – with stores nearly 10 times more likely to be penalised for online returns than to be credited for online sales. This was followed by Confectionery (3.5 times more likely) and Stationery (3.3 times).

The Clothing categories, which formed the biggest proportion of the whole sample, were twice as likely to be penalised for an online return than to be credited for an online sale.

Conversely, Grocery, Cinemas and Food and Beverage categories were more likely to be credited for online sales in their catchment than to be penalised for online returns. In fact, only these categories saw a positive differential between online sales accreditation and penalisation for online returns.


Differential between online return deductions and online sales credits

Figure 6

Source: Savills Research

Stores in the North East had the greatest disparity between accreditation and penalisation with stores in this area 2.8 times more likely to be penalised for online returns compared with being credited for online sales. Twice that of stores in the South East and North West (both 1.4 times more likely).


Key Contacts

Stephen Toal

Stephen Toal

Commercial Property Management


+44 (0) 161 244 7735


Tom Winter

Tom Winter

Research Analyst
Property Management

Margaret Street

+44 (0) 161 236 8644


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