(UPDATED 5:10 p.m. ET)
Online retailers can make it easier for customers to return unwanted merchandise through a modified program from FedEx that doesn’t require a label or box.
The service represents the latest response to shoppers’ expectations for flexible, convenient returns options as e-commerce continues to grow. UPS introduced a frictionless returns capability a year ago with the acquisition of Happy Returns.
The latest survey data shows return policies significantly influence shopping decisions. UPS (NYSE: UPS) and the National Retail Federation in December estimated that the total value of returns in 2024 was $890 billion. Retailers estimated that 16.9% of their annual sales would be returned.
FedEx (NYSE: FDX) on Tuesday said FedEx Easy Returns allows e-commerce merchants to offer customers a hassle-free, low-cost returns solution, starting this summer with about 3,000 drop-off locations at FedEx Office and Kohl’s stores locations. The service, which is supported by supply chain management software from Blue Yonder, will also help streamline the returns process for merchants. Returns will be routed through a reverse logistics facility for recovery and consolidation, helping merchants ensure the accuracy and speed of the return, saving materials and space.
Easy Returns builds on a no-box, no-label consolidated returns service launched more than two years ago. Merchants who use Easy Returns exchange speed for cost because Easy Returns combines customer returns into one shipment. With other FedEx return solutions, each package ships individually. Other differences are the addition of Kohl’s stores as drop-off locations, the use of Blue Yonder instead of home-grown technology as the information backbone, and a lower price point, according to a FedEx spokesperson.
Consumers will be able to return items weighing less than 10 pounds without needing to print labels or use packaging, according to a company announcement. Instead, they will use a QR code to confirm their order. Plans call for fast expansion nationwide.
The integrated logistics and parcel delivery company said the service will be ideal for apparel, accessories and soft goods that fit in a poly bag.
Shippers will need a minimum average return volume of about 10 pieces per day to qualify for FedEx Easy Returns. The product is most suitable for merchants with about 3,000 returns per year or higher, the company said.
Offering merchants a good returns option is a way for FedEx and UPS to stand out from competitors because e-commerce delivery alone is a commoditized product, with many regional couriers like SpeedX, LaserShip and OnTrac able to provide two-day service to major metropolitan areas, said e-commerce consultant Derek Lossing.
The NRF and UPS report said 76% of consumers consider free returns a key factor in deciding where to shop and 67% said a negative return experience would discourage them from shopping with a retailer again. Eighty-four percent of consumers report being more likely to shop with a retailer that offers no-box/no-label returns and immediate refunds.
A January survey by Morning Consult, underwritten by FedEx, showed consumers have diverging preferences for returning online purchases based on income and generation. Two-thirds of higher-income earners and nearly 60% of baby boomers favor returning items in-store, while 20% of Gen Z and millennials opt for home pickup, with 19% of millennials also choosing mailbox drop-offs.
“Consumers are making it clear that flexibility and convenience are essential when it comes to returns,” said Jason Brenner, senior vice president, digital portfolio at FedEx, in a news release about the survey. “The continued rise in no-label, no-box returns and growing demand for home pickup options reinforce the need for retailers to offer solutions that make returns more seamless for consumers.”
Opinions on the current ease of returns are split. While 51% of consumers believe returns have improved, 32% are neutral, and 17% think the process has become more challenging, according to the survey of 2,200 U.S. consumers and 1,000 businesses. Millennials and high-income groups are the most optimistic, while Gen X, Gen Z and lower-income consumers express skepticism.
Two-thirds of respondents said they consider return policies before making a purchase. Nearly 30% of respondents said return policies directly impact whether they complete a transaction, emphasizing how transparent and flexible options can build customer loyalty and drive sales.
Rival UPS acquired software and reverse logistics firm Happy Returns from PayPal in late 2023. Consumers can drop off returned goods at nearly 8,000 locations, including about 5,200 UPS Store locations. At the time of the deal, more than 800 merchants were Happy Returns clients. UPS says the Happy Returns technology has driven a 50% efficiency increase in item sorting, while the use of warehouse robots has helped decrease by 35% the average time to ship out items to retailers.
FedEx has existing reverse logistics capabilities, including transportation, label creation and technology, designed to simplify the returns experience.
FedEx Easy Returns and UPS Happy Returns are more environmentally sustainable options for merchants that help reduce the amount of packaging and product waste by using a consolidated returns process.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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