The Future of Returns With Eric Wimer From Sway - Ep. 36
In This Episode
Returns have come a long way since the early days of ecommerce, but they still have a long way to go. Eric Wimer, co-founder and CEO at Sway, envisions a future where returns are easy, fast, and cost-effective for both businesses and consumers. In this episode of Unboxing Logistics, he and Lori discuss what it will take to make that vision a reality.
A short history of returns
Eric explains that when ecommerce was just starting, “most sellers didn't accept returns.” Later, as ecommerce became more popular, sellers began accepting returns—but the process was cumbersome and slow. It involved filling out a form, then waiting weeks or months for the return to be processed.
According to Eric, Amazon helped pave the way for a smoother returns system. “Historically your only option would have been, I have to mail this thing. … I've got to package everything up, box it, label it, and go drop it off. … Well, Amazon really led the way [by] starting to offer multiple options for how you would send these items back.”
Three ways to handle returns
Today, consumers have three options for returning products (depending on what the merchant supports):
- Shipping. Eric calls this the “traditional option.” The consumer prints a shipping label, packages the product themselves, and ships the package back to the seller.
- Drop-off. This option involves dropping a product off at a local retail location like Staples, Whole Foods, or a carrier store. Because it only requires a QR code scan, this option allows for boxless and labelless returns.
- Home pickup. Eric explains that with home pickup, “you can drop an item outside your door or choose to hand it to a driver directly, and that item gets picked up from your home. The driver scans the item in, and there's the ability for that refund to get released upon pickup.”
Tips for a great returns policy and process
A great returns policy starts with simplicity, clarity, and visibility. Eric notes that many customers appreciate “getting an email once the brand receives the item in their warehouse and is actually processing it and then getting another notification once the refund has been released.”
He also points out that fast returns benefit ecommerce merchants more than you might think. “The faster that you get someone their refund, the quicker they get back into the ecosystem to shop. So there's a business case for this.”
Links
- Connect with Eric on LinkedIn: https://www.linkedin.com/in/wimes/
- Visit Sway’s website: https://www.shipsway.com/
Transcript
Lori Boyer 00:00
Welcome everyone to Unboxing Logistics. I'm your host, Lori Boyer from EasyPost, and today I am really excited to be talking about returns. So, returns is one of the big things that we deal with and face in this industry. And, you know, I get a lot of questions about kind of what do returns look like? What, what do consumers want with returns these days?
What is everybody doing? You know, how do I keep the standards so that I'm, you know, providing a great experience, but also managing costs? All of those questions are returns. So I have invited on an amazing guest today to walk us through kind of the evolution of the returns market. What it looked like in the past, how it's changing.
So Eric Wimer of Sway, formerly Returnmates, is here with us today. Eric, why don't you introduce yourself to our community out there? Tell us a little bit about your background and who you are.
Eric Wimer 01:05
Awesome. Yeah, Lori, it's great to be here. Thanks for the warm introduction. Yeah, I'm Eric Wimer. I'm the co founder and CEO at Sway. We used to be called Returnmates. We started the business about four years ago in Los Angeles. Most of my early career was spent at Uber from 2012 to mid 2017. And I was primarily launching markets and operating them all over the, all over the United States. So I've spent the past 10 years or so in this gig space, kind of moving people and things around. And yeah, I'm really excited to chat with you today about, you know, one of my favorite topics, returns.
Lori Boyer 01:49
Awesome. That is fantastic. And it really is interesting how kind of the, the Uber sphere, all of that logistical, movement of things has become so big and how it really does tie into today's returns market.
So we're going to jump into that. But before we do, our community always, we'd love to get to know our guests just a little bit. So I'm going to put you on the spot and ask you a couple of questions. So question number one, what would be your go to comfort meal? What food do you just love when you're thinking, I need some, some of that good old comfort. What's, what's your fave?
Eric Wimer 02:32
I love that question. I'm going to give you an answer that is probably not the norm that you get from people, but I live in, I live in Los Angeles. I love the beach culture, surf culture, things like that. And I am an açaí bowl aficionado. So it's one of those things, it kind of tastes like a dessert, but you know, you can also eat it in the morning.
Lori Boyer 02:55
Say it again, because I, I'm starting to maybe embarrass myself in front of everyone, but an açaí bowl?
Eric Wimer 03:02
Yeah, so it's a Brazilian fruit. And they make it into a bowl. So it kind of looks like a smoothie. And then you put a bunch of toppings on it. So granola, you can put cacao a bunch of sliced fresh fruit and yeah, it's delicious. Drizzle, a little honey on there.
You've got a, you've got a nice little breakfast.
Lori Boyer 03:23
Eric, tell me, okay, first, how do you spell acai?
Eric Wimer 03:27
A C A I.
Lori Boyer 03:30
Okay, okay, okay. I've seen it. Acai. Sometimes when you don't know what you're doing, you think it's acai or something.
Eric Wimer 03:38
Yeah, exactly.
Lori Boyer 03:38
So it's a Brazilian fruit.
Eric Wimer 03:41
It is. Yes. That's where, that's where it's grown, and they make it into a smoothie. So the base is a smoothie. You could have, you know, any type of milk that you like in there, typically frozen banana. And then on the top is where it gets to be a lot of fun. So granola, sliced fresh fruit, drizzle some honey on there. Yeah, it's, it's fantastic. So as strange as that is, that's, you know, my kind of go to comfort food, cause you kind of mix breakfast with dessert. And yeah, it's, it's fantastic.
Lori Boyer 04:15
Oh man, that sounds amazing. Honestly, that is so, Eric, I can see we could be like best buddies. Cause that sounds so good to me, like something I would love, especially if you're there in the warmth of the LA sun and getting some nice cool food. So I think I know the answer to this one, but would you prefer mountains or beach?
Eric Wimer 04:40
Oh, wow. That's a really, really tough question. So the reason I love Los Angeles is because you have both. But if I had to choose one, I would choose the beach. I love to surf. I love the sand. But I also love to snowboard and be in the mountains and do those types of things. So it's a, it's a really difficult one.
In an ideal world, you have both that are within striking distance. But proximity wise where I'm going to live, I would I would choose the beach.
Lori Boyer 05:12
Okay, good to know. He's going for the beach. Mountain lovers out there, we can ride him on. So okay, Eric, we always start with a couple of takeaways from my guests.
It's really important that if people only caught one or two things that they, you can share those right now at the beginning. And we can go back and follow up on those more as we go. But if people could only take away one to two, three things from today's conversation, what is it that you would want them to remember?
Eric Wimer 05:43
Yeah. So one thing is that consumer expectations around returns are just ever evolving. It's not something that's stagnant. It's a constant iteration. And there are a number of reasons for that, which I'm excited to talk to you about later today. Another piece is home pickup is a new solution. It's very much in the early days, but essentially having someone come to your home to process the return and grabbing it from your doorstep.
And I think there's a common misconception out there that it's more expensive. And we've actually found that it's cheaper, faster, and it can create a more loyal customer. So that's something I'm excited to discuss. And then lastly, returns are just incredibly unsustainable in their current form and how they're currently being processed.
There's over a hundred billion pounds of returns that end up in a landfill every year. And so this is kind of a call to action that we just need to think about it. We need to put our heads together to come up with a solution in order to help reduce that and create a more sustainable supply chain for that process.
Lori Boyer 07:04
I love that. The sustainability piece is so big and I do hear from people all the time about it. You know, it just makes us feel a little sick to think of all these brand new products just filling, you know, landfills out there. So I'm excited to follow up on that. I loved how you started with the consumer expectations are continuing to shift.
Because I think that sometimes we get stuck in the mindset of, oh, well, this is what consumers think. So now I'm going to move forward with my plan based on what they think now. And, and kind of that agility and flexibility when it comes to expectations is so critical. Can you take me back to maybe how returns were at the very beginning of sort of the ecommerce coming out.
You know, when I was young and there wasn't really even ecommerce around, you just took, if you had a problem with something, you just took it back to the store because you bought it at a store. So, you know, let's remind everybody kind of how, how did returns start? And and how has that evolved a little bit?
Eric Wimer 08:07
Yeah, totally. I mean, I think if, depending on how far we go back, just the earliest days of ecommerce. In most cases, you didn't return anything, right? Most of these, most of these sellers didn't accept returns. I remember buying a video game on eBay when I was a kid and there was just no option to return. You also had no idea when the item was going to show up or if an item was going to show up at all. And so that kind of leads into when ecommerce became a little bit more prevalent. So the way you would, you would process a return is you would have to contact the company.
Hopefully you could get ahold of the company. They may have you fill out some type of form. So you'd go through some arduous process to let them know why you're sending the item back. There was typically a very short return window that you had to that you had to abide by. And you had no visibility on how the item was getting back or when it got back.
And then refunds could take weeks or months. So we think about where returns are today compared to that. It's come a long way. And it's come a long way because of the penetration that we've seen into online shopping and ecommerce as a whole.
Lori Boyer 09:32
It seems like that would have been a barrier early on with ecommerce that people didn't want to buy things online because of the returns process. So I guess, how did it shift? How did they overcome that barrier and start being more, you know, willing to do returns?
Eric Wimer 09:49
Yeah, absolutely. I think what these companies found after speaking to customers and continuing to sell more online was that there's this psychological moment that you have when you're thinking about buying something.
And if, if you need the confidence in order to get yourself over the hump to click purchase. Right. And I think what we found was returns is actually a key component of that. So if the customer up front knew what the return policy was, it was very clear, and you could reduce the friction for them to get that item back, you're more likely to purchase. And so the whole return side of the equation has played a very key role in just opening up the floodgates to people purchasing online.
Lori Boyer 10:44
So I have a kind of question for you. So I've noticed. I'm almost a Gen Xer, kind of right on that border with millennial, but my my daughter is Gen Z, early 20, you know. And I am not very good at returns.
And I'm wondering if it's related to. So I'll buy stuff and then I don't get around to returning it. And then and so I'm a little more hesitant. Where my daughter literally, Eric, she, I swear, she buys stuff and return something every day. She is just, she's grown up, I guess, maybe with that trust just already built in where I'm like, oh, that's not a natural part of my process.
Do you feel like, I guess, certain generations maybe, that you have to approach them differently with returns, or am I just kind of a dinosaur, maybe, who's a little bit slower?
Eric Wimer 11:32
I truly believe that each generation has a certain level of education on returns. At least a foundational education on just how to process these things.
And yeah, what we're seeing with Gen Z is they grew up purchasing things online, right? Whereas we may not have, you know, purchased as many things and, and the return process was kind of still evolving dramatically when we were doing our first purchases. So absolutely. I think what we found is there's a bunch of different types of shoppers.
There's the shopper that doesn't return anything, right? They buy online, but they don't return anything. There's people that. I'm the type of person that I'm constantly buying online and constantly returning. Just part of the process. And then there's another type of shopper that doesn't shop online at all, right? They're actually just shopping in person. And so those three personas all kind of play a role in the expectations that we have around the purchasing process and the return process.
And yeah, it's a, it's a really interesting dynamic but it's clear that in order for everyone to get to that same level of having that comfort the process has to continue to evolve.
Lori Boyer 12:55
I love it. And you mentioned, one of the things you mentioned in your takeaways was that kind of pick up sort of service. And I can see, and we're going to get into that in a little bit, but I could see how a person like me, you know, that maybe if your target audience is somebody like me, that would be very attractive. Because I obviously just don't get around and I end up having items that I pass the window date and I'm just stuck with.
So we'll get back to that, but I want to talk about it. One thing I'd question for you. So we really can't talk about returns, or anything ecommerce almost, without mentioning Amazon. How did Amazon come in and kind of impact just the industry when it comes to returns?
Eric Wimer 13:34
Yeah, so I'll start on the other side of the equation, which is the purchasing, because I think it's a really, really important piece of the, of the puzzle. But Amazon has made the purchasing process incredibly seamless.
There's a reason why we open that app up and within a click, you can purchase something. And so I think that was one of the core attributes of that service that helped drive more, more ecommerce penetration. But on the return side, I think one thing that they've done that's been really interesting early on was offer options on how you're going to send that return back.
So historically your only option would have been, hey, I have to, I have to mail this thing. Right? So I've got to package everything up, box it, label it, and go drop it off at USPS or another type of carrier. Well, Amazon really kind of led the way and starting to offer multiple options for how you would send these items back.
So, you know, they purchased Whole Foods and then created that network where you could go drop off, and those became boxless and labelless drop offs. And then you look at your phone as soon as they scan the items and you see your refund. So that's getting people back into the ecosystem really quickly. So that whole process end to end, I think it's something Amazon did really well, focusing on the customer experience. But you know what, what we sometimes don't realize is that ends up being the reason that we go back, right. The reason that we continue to purchase. So creating a seamless experience is just really critical.
Lori Boyer 15:19
And, you know, Amazon, we, sometimes we, in the industry, if you're, you know, that fight against Amazon, it feels like this behemoth that, you know, you're trying to compete with Amazon.
But the truth is, Amazon's really opened a lot of doors for everybody else. In a way, it was the Amazon that got me feeling comfortable buying things online. At first, I only ever bought things on Amazon, got used to that, and then it sort of spread to everyone else. Similarly, you know, I was just reading an article that mentioned how, you know, Amazon this year on Prime Day broke all their records for the most sales.
But on the flip side, 7 billion was spent, during Prime Day for other businesses outside of Amazon. So, you know, we are taking advantage and also growing with Amazon. What are you seeing in terms of maybe Amazon returns today? You know, what, what, I guess, return options are you seeing being available? Not just at Amazon, but across different companies?
Eric Wimer 16:18
Yeah, there's a few key areas or options that people have to return items that they purchased online. So the first and again, more traditional option is we're going to pass you this shipping label and we expect you to package the item back up, right? So you're going to need a printer.
You're going to need tape and you're going to still need your box. Or maybe you can go grab another box that's lying around, maybe something from Amazon, but so that, that's kind of the traditional option.
Lori Boyer 16:48
And Eric, how many companies do you think are still doing the traditional? I mean, I, I'm not going to quote you on it and we're going ...
Eric Wimer 16:55
Yeah, don't quote me on the percentage, but I, but I would say almost every single company has that as at least one option.
Lori Boyer 17:04
An option. Okay. And they should? Is that something consumers expect?
Eric Wimer 17:10
I think in order to, in order to remove that option, you would really need the other options to cover 100 percent of zip codes in the country, whether it's drop off or having someone come to your home to pick the items up. So I think those have been the limiting factors as to why mail in in that shape and form would still be relevant.
Lori Boyer 17:37
Okay. Okay, so mail in is the standard. Pretty much everybody offers that. That's the basics anyway, not the standard, but a basic. Okay, what else do we got?
Eric Wimer 17:47
Exactly. So another option would be to drop it off at a local retail location or whether it's, so whether you're dropping it off in store to that same brand, or maybe you're dropping it off at a Staples or a Whole Foods or another carrier.
And this is something that's become a lot more popular over the last 10 to 15 years. And that option, some of the benefits of that are in a lot of cases, you don't have to package the items up, so there are now boxless, labelless options where you get passed a QR code, I show up at one of those stores, I hand the person my returns, and then, you know, they scan your QR code, so that's a little bit better.
Right. We don't have to get the tape out. Most people don't have a printer these days. If you do have a printer, it's probably because you're printing return labels. I would, I would take a bet on that. And so yeah, that option, what, the way I always think about that option is. It's a little bit better than what existed before. But it's, it's still not the most seamless option that you can provide. And the third option, so there's, there's really three, the third option, which is definitely more, this is earlier in the evolution evolution stage, is the home pickup. So with the home pickup, you can drop an item outside your door or choose to hand it to a driver directly. And that item gets picked up directly from your home.
And the driver scans the item in and there's the ability for that refund to get released right upon pickup. So you're bringing that same in store drop off experience to the shopper's door. And in a world where we all value convenience, right? We have food delivery at the click of a button. We have ride share at the click of a button.
Being able to process your return at the door at the click of a button is pretty special.
Lori Boyer 20:01
Yeah. Are, are you seeing companies like Amazon starting to do this kind of stuff?
Eric Wimer 20:06
There was an article a few days, a few weeks ago that actually stated that Amazon was testing this in a couple of Texas markets. So it's interesting, and it goes back to your point about Amazon not only leading the way in some of these areas, but encouraging the rest of the market to follow to satisfy these changing consumer expectations.
Lori Boyer 20:33
Yeah. To kind of set that standard. So that's really interesting for me. Again, personally, that pickup would obviously be huge. So okay, we're going to dive into the pickup. I want to get to that. We're going to, I have some frequently asked questions just around returns that I run, want to make sure we get to, but I would love to talk a little bit more about this pickup option.
So what, I guess, what are the pros and cons? So one of my concerns right off is, I guess it's going back to anything new. Like we said earlier, you know, there was that trust factor early on of like, oh, will the company really take my returns? If I just send this off, is this actually going to work? You know?
So I guess as a consumer, there's some of those concerns. What, I guess, what are the pros and cons of, of the, the pickup service?
Eric Wimer 21:21
As with anything new, there's always an educational curve to get over with the shopper. What we had actually seen was once somebody uses it once, there's a very high likelihood they come back to use it again.
So I think on the con side or on the opportunity side, it, it is an educational play in order to get people comfortable with the service. So that's definitely a challenge initially. There, and that's the same for drop off, right? Just building trust with ecommerce is so, so critical because it's, it's meeting, it's the digital and the physical world meeting.
Right. So you have, you're trusting that that package is going to show up at your door. And then when you send it back, you want to know that you can get it out of your house and that you get your refund back so you can start shopping again or potentially exchange for another item. I think the benefit is that again in a world of convenience, you can simply just leave your item at the door.
You don't need any type of box, which helps make things a bit more sustainable. You don't need to print a label, so you don't need to have a printer lying around, taking up space in your home and wasting paper. And everything can be processed really quickly to get that refund back to you as soon as possible.
The thing that I always say is people want two things when it comes to returns. They want to get the item out of their house so they don't have to look at it anymore, and they want their money back. Those are kind of the two core pieces that, you know, people are looking to solve when they, when they send something back.
Lori Boyer 23:07
Yeah, really. It's very interesting to me because again, I'm that market, maybe who my daughter is definitely a go drop it off at a place. You know, she, she returns things all the time, but she's just good about always going and swinging by the UPS store, swinging by a retail store, you know, and dropping it back off.
She's definitely not printing things off. Where I'm the one who, you know, I'll be busy and I don't want to drive out and go drop something off. So that is something that I feel like in many ways, there's a lot of opportunity there for people like me who are not returning things. So that's super exciting.
I, I'm assuming. So for our average ecommerce person out there that they're going to be wanting to offer multiple options.
Eric Wimer 23:49
Yeah, absolutely. I mean, even if you just think about the different geographies across the country, it's, it's almost impossible today to cover every zip code with every single option, right?
You may, you may have to drive. If you live in a very rural area, you may have to drive 15, 20 minutes to get to the closest drop off location. So I believe it's really critical that there are multiple options. So yeah, so that consumers can choose what works best for them to send those items back. And then again, as the industry continues to evolve, you know, I imagine a world where we, we, anyone could come to your doorstep to grab those items and, and pick them up regardless of where you live, just to make that process more seamless.
Lori Boyer 24:40
Who is a person? Are we talking like an Uber driver type person? Is it the carrier who's coming to pick up the item? I guess I'm thinking security wise of making sure that the item doesn't get lost or stolen as the business. Who is that kind of person who would be coming to pick it up?
Eric Wimer 24:57
Yeah, totally. And, and just to preface, UPS, FedEx, USPS, they've been offering pickups at your door for quite some time. The difference is that it hasn't been the most reliable service. And then from a visibility and tracking standpoint and processing of the actual return. That's where things have been lagging. And so, you know, at Sway, we use a network of independent contractors.
So similar to how Uber contracts with drivers or for Uber Eats, people delivering food. The difference is these folks are on 30 to 50 stop routes in a neighborhood, and they're not just doing return pickups, they're doing deliveries as well. So when they come to the door, they will get a full description of what they're picking up and they actually then scan that item and tag it with a QR code.
And then those items come back to local facilities where they're processed. So every step of this process is fully visible to both the brand and the shopper, which we found was just a really critical piece of the experience to give people the confidence to send their items back a different way.
Lori Boyer 26:27
Yeah. I think it's that confidence piece that, you know, has to be built up. And, and I, I, yeah, I love the idea of having multiple options. How would you, how do you recommend, so let's say that you are wanting to add new return options or that you're just shifting your current returns, you know, maybe you're changing your the window of returns or doing anything. How do you recommend people communicate their policies and their options to customers?
Eric Wimer 26:56
I think it's best to always be transparent and upfront. There's a reason why you're seeing brands return options or return policies on the landing pages of their websites. Or on the product, under the product descriptions. Because again, it's encouraging you to purchase if you know that it's a seamless returns process.
So that's a, that's a really critical component. I mean, I would recommend definitely doing the research on the different return portals out there because the return management systems, because they are the ones that really are able to offer you the specific options. So I'd recommend choosing one that offers the in store drop off on top of the mailing the item back. And now some of them are starting, we're actually integrating with a number of them, they're starting to offer the home pickup program. So I would want to be with a return portal and platform that is continuing to innovate and adding, you know, as many options as possible for the, for the shopper.
Lori Boyer 28:07
That's perfect. That was one of my, so I have a little list of frequently asked questions from my audience around returns. And one of them was like, what kind of features should we be looking at in an online portal? So first it sounds like kind of flexibility and innovation and options. Are there other things that they should be looking for in like a portal?
Eric Wimer 28:25
Yeah. One thing that we're really passionate about is exchanges. So when you're thinking about, okay, how do I reduce my overall returns, right? Because the goal of home pickup is not to increase the return rate. It's just to provide a more convenient option for how people are sending their items back. So exchanges is a really interesting option because at the end of the day, the brands want to just drive more sales.
So if I didn't get the right item, help me get the right item. Is it a color issue? Is it a size issue? Now that obviously relates more to apparel, but if it's electronics, perhaps there is another model that you would like just as much or more as the one that you're sending back. And so looking for a portal that offers a really seamless exchange process is, I think, really important when yeah, considering a new platform.
Lori Boyer 29:27
Okay. So exchange process, lots of flexibility. I love that you brought up the fact that we're trying to reduce returns. Any other tips around helping companies who do feel overwhelmed with returns? How can what are some just basics that they can do to try to cut back?
Eric Wimer 29:46
Yeah, so I mean, I'm looking at this from, because we're all consumers too right, when I when I purchase something online, just having really accurate product descriptions is always helpful. Having reviews at the bottom of the page so that you can see what other people are experiencing with sizing and things like that.
And I think at the end of the day, the brand has to take customer feedback and iterate their product on that. So for example, if everyone is saying, hey, this T-shirt that I purchased, I ordered a medium, but it's fitting like an extra large, like they need to update that on their end in order to help reduce the amount of returns that are coming through.
But ultimately, I believe exchanges is the best way because everyone wins in that scenario. The consumer gets what they want and the brand saves the sale, which to them is super critical given, you know, the overall cost of a return.
Lori Boyer 30:45
A couple of things you've mentioned, which I really think are critical are transparency and being really clear in in what the process is. You know, there's been a lot of research done around that, that as long as people feel like it's that trust piece, I think, but as long as people feel like they know what's happening and, and what the next step is, and maybe where their item is at all of those kinds of things, then they, they'll trust a company more.
Do you have any tips? I, people struggle with creating kind of good, clear, transparent return policies while not making them, you know, also getting bogged down with the legal jargon and all of that. So any, any tips for people with, when it comes to creating policies and being transparent?
Eric Wimer 31:30
Yeah, I think just being up front with the policies and and simplifying it. So if I'm shopping on a, on a website and I see, okay, there's a fee for the return to ship it back. There's a very short return window, and there's a restocking fee. That's naturally going to discourage me from shopping at that brand. Or maybe there's no return option at all. It's just a lot more risky in that scenario, right?
So the confidence level goes down when you're thinking about the purchase. So I think just being upfront and very clear about the policies, but then also providing very strong visibility throughout the returns process. One thing that I found really helpful is getting an email once the brand receives the item in their warehouse and is actually processing it and then getting another notification once the refund has been released. Because those are things that 10, 15 years ago there was zero visibility, and you were kind of just waiting around checking your bank statements or, you know, checking your banking app every day to see when you're going to get your money back.
And again, one thing that the industry has seen is the faster that you get someone their refund, the quicker they get back into the ecosystem to shop. So there's a business case for this as well outside of just the shopper's need for visibility.
Lori Boyer 33:05
Yes. And, you know, I love how, I feel like one of the things you mentioned was, you know, if you've got all these different fees and people see them. I think one of the worst things, though, is if you have fees and people don't see them. I recently had tried to return and there was a restocking fee that I was not aware of. And I, so I just felt caught off guard and, and felt maybe like, whoa, next time, are there going to be other fees I don't know about?
So only thing worse than having too many fees is having too many fees that you don't let people know about, I think. Let's talk about some of the standards with like fees. I mean, I just, people often want to know what is everyone else doing. And so, because, you know, they want to make sure they're doing, that they're not worse or, or more, you know, than their competition.
So, you know, what, when do companies typically charge things like restocking fees? Are they okay to do it now? Is that okay with the consumer? For a while, it seemed like everything with returns had to be free, free, free, free, free. There's been some shifting with so many costs. You know, what, what is typical? What are some typical fees people do charge and when?
Eric Wimer 34:13
Yeah, so some people charge for the shipping to get the item back. And that does tend to be one of the most expensive components of processing a return for a brand or a merchant. And so that's an important consideration. And then there's also a restocking fee, which some brands charge, and that restocking fee is aimed to offset the cost of actually processing the return.
So whether there's any type of refurbishment, actually restocking it. So we could just getting it ready to sell to another consumer. And so there, it varies widely what people do. There is the standard. There's the very high standard of we're offering, you know, free shipping and returns, and we're completely reducing the friction. Now that doesn't come without policies, right? Typically most companies have 14 to 30 day return windows, that's kind of the standard.
Lori Boyer 35:18
Fourteen to 30 is sort of the standard. Okay. Good to know.
Eric Wimer 35:20
Yeah, yeah, exactly. And then, you know, with those companies, they're paying for the shipping for the item to get back. They're providing you with a label. So that's kind of the highest standard.
You know, the middle is, hey, you know, we're going to charge you a small fee to ship this item back, but perhaps there's no restocking fee. And then, you know, the, the more challenging return situations for the, for the shopper are when, you know, there's both a shipping fee and a restocking fee. Now this can happen for large items.
I recently returned a piece of art and it weighed 100 pounds and they charged me, you know, 18 to 20 percent of that item to process it just because there was a significant cost to them picking that item up and sending it back and getting it ready for someone else to buy. So it really just depends on the type of item that the cost or the brands are selling
Lori Boyer 36:17
And I think probably it's good for brands to just test and see at what point maybe sales start to drop off. If you're, you know, there's going to be the the cost that you'll be getting some money back from the fees. But at what point do people not buy as much? I'm guessing testing is always what you would recommend.
Eric Wimer 36:41
Yeah. Testing, I'd say looking at other brands or merchants in a similar space, you know, how are they handling their policies? Because what you don't want to do is have a worse policy than a competitor. Right. Or a, if I'm a, an athletics brand or athleisure brand, and There's another, there's a competitor that is free returns, and I'm charging for the shipping and a restocking fee, it's just a lower likelihood that you're going to get loyal customers over time, right?
They may purchase the first time. You may get a lot of first time buyers, but the key to getting them to come back is you have to create that. You have to build that trust and create a really seamless experience for them on both the purchase and the return.
Lori Boyer 37:30
Yeah, absolutely. So we're running a little low on time, but I really want to make sure that we talk on one final piece of cost versus customer experience. So I think that that's kind of a never ending discussion of, you know, we can create an amazing experience, but it might get a little bit spendy. I guess what are your, what are you seeing in the industry? What is best in terms of balancing just the cost aspect while creating an amazing customer experience?
Eric Wimer 38:02
It's a great question. This is something that ebbs and flows constantly, right? With the market. You'll hear from brands, we need to save as much money as possible, right? And you're kind of disregarding the customer experience. And then in really good times, people are trying to find ways to differentiate and are hyper focused on the, on the consumer.
The reality is, it has to be a balance of both, right? You can't swing too far in one direction. One thing that we've found at Sway is that you can provide the elevated customer experience, but we couple that with consolidation. Where we're putting multiple returns from the same retailer in one box and shipping it back in bulk.
Those types of things allow you to reduce costs while you're providing the enhanced experience encouraging folks to exchange an item versus just returning it is also another way to, I mentioned earlier, but save the sale and help reduce your overall exposure of those costs because the consumer is actually purchasing something new.
So there's a host of different ways to balance the experience and the cost, but you can't ignore either of them, right? They both have to be a consideration when you're setting up your, your return process.
Lori Boyer 39:34
So at Sway, you know, if somebody is looking for some sort of advice around how do I balance it?? Is that something that you guys help with I know that when people call easy post a lot of times they may be asking totally random things like, oh, we want to expand into an international market. Can you help advise us? Can people ask you those kind of things about returns?
Eric Wimer 39:55
Totally. I mean, one of the, one of the cool parts of our process when we're pitching a merchant on our solutions is that we'll actually take a look at all of the returns data. We want to understand, how are people sending items back now?
What is the operational flow? Like where do those items ultimately end up? And then with our local network, since we have, you know, warehouses in all of these local cities, we can then come back to them with a proposal on the path that we would recommend those returns follow to make it as efficient as possible.
So again, to help reduce those per unit costs for the return while enhancing the experience with the home pickup, the quicker refunds, the faster processing time. So absolutely. Yeah, that's, that's what we enjoy doing is, is trying to help them build a full fledged solution, both technically, but also, you know, the, the dirty work of logistics, right. Moving things around in the physical world.
Lori Boyer 40:59
I, that's something I can't say enough to our community out there. You have so many resources available to you when you're working with partners and when you have different vendors. There are always people you can reach out to and get advice and help. So don't hesitate to reach out to, you know, if you are at returns, contact your returns company.
If you have questions around anything, really, you've got people probably who can help you. So, final question, Eric, what do you see as the future of returns? Any other innovations that you know, you see coming down the line? Anything you're excited about?
Eric Wimer 41:35
Yeah, I love that question. So the daydreaming is the most fun part about, about working in this industry. But the vision that we have for returns is eventually let's say you're getting a package delivered. And we open up this communication channel with you, and you can actually hit a button and tell us you want to give us a return at the door when we drop off that delivery. And so that's a pretty amazing experience in and of itself, right?
You didn't have to leave, it's boxless, labelless, you place it outside. But the icing on the cake is that you would then get the option to get your refund instantly. So if you think about how PayPal or Venmo or any of these services give you the option to get your money right away, and maybe there's a small fee for that.
That's what we envision for returns. Because again, at the end of the day, people want the items out of their home and they want to get their money back. And this provides a really good opportunity to get them back into the shopping ecosystem for the brand. So that's kind of the future that we're envisioning.
And then that item, instead of that item going back and perhaps getting thrown out or ending up in a landfill, if that item is not going to go back on the shelf, we can help resell it. We can put it on a secondary marketplace, give that item a second life. So that's really what we get excited about longer term and, you know, want to continue to innovate in the, in the industry.
Lori Boyer 43:12
That is so cool. I think you're even going to get you know, old people like me, Lori Boyer, getting some returns going. So really interesting. I think you and I could keep talking for hours on other things, but before we go, I just, again, I want to thank you so much, Eric, for coming on, sharing all that info about returns.
Community out there. If you have any questions, please feel free to reach out. Even if it's just around standards or, or, you know, things that ideas for how to make a great customer experience when it comes to returns. Eric, is there somewhere that people can connect with you? Are you on LinkedIn? If they want to learn more from you.
Eric Wimer 43:53
Yeah, totally. LinkedIn, just my name, Eric Wimer, and then my email is eric@shipsway.com.
Lori Boyer 44:00
Eric, thank you so much again for being here. Really insightful, interesting stuff. Any final words or a goodbye to our audience?
Eric Wimer 44:09
No, thank you so much for having me on. And yeah, if anyone needs any help with the returns, definitely reach out.
Lori Boyer 44:17
Awesome. We'll see you all next time.