Let people keep their returns

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📝 Context

Topic: Ecommerce | Customer Experience
For: B2C
Research date: April 2025
Universities: University of Notre Dame

The gluten-free pasta you’ve ordered online finally arrives, but the box is a bit damaged. You contact the brand, bracing yourself for a back-and-forth before you can send it back and get a refund.

Instead, you get a pleasant surprise, as they reply saying: “We’re so sorry for the problem. Your refund is on the way. Meanwhile, please feel free to donate the pasta to your nearest foodbank if it’s still safe to eat.”

We’ve seen how instant refunds and a seamless returns and exchange policy can drive customer satisfaction. Now the science says that letting customers keep some items they would like to return can go a long way in driving future sales.

P.S.: While people like fast deliveries for online orders, when items arrive sooner than expected (e.g. arrives in 3 days when you said 5-7 days), they can increase the likelihood of returns by 3.8% per day of early delivery.

📈 Recommendation

Let customers keep moderate to low-priced items they’re dissatisfied with, while still giving them a full refund. 

People will like you more, and be more likely to buy from you again and leave positive reviews.

To maximize the effectiveness of “returnless returns”, frame the decision as a convenience to the customer or an environmental saving, don’t ask for proof of the problem and suggest they donate the item instead of throwing it away.

🎓 Findings

• Allowing people to keep an unwanted product they want to return (while giving a full refund), makes them more likely to buy again, like you more, and give more positive reviews.

• As part of a series of 9 experiments, researchers found that “returnless returns” led to:

  • 24.6% higher ratings for a candy brand when people were sent the wrong candy corn and told to keep it, instead of being asked to return it

  • 19.3% better opinions of the brand for a defective pen

  • 30.1% more positive reviews for a brand that accidentally sent the wrong shirt to customers, compared to when they were given a replacement instead of a returnless refund

  • 26% more positive reviews for the same shirt brand when a standard return policy, requiring them to send back the shirt, was in place

  • 30% higher perceived value and 13% higher positive word of mouth for a sweater that was unflattering, as well as the perception of the brand being considered 16% warmer when compared to a standard returns policy

• The effect:

  • Strengthens when:

    • The decision to allow returnless returns is framed as a case-by-case decision, a policy decision, a customer convenience or an environmental decision (cutting out unnecessary shipping to return the item)

    • It’s suggested that the unwanted item be donated to charity

  • Weakens when people are asked to show proof of a problem with the product, leading to 20% less positive word of mouth and the brand being perceived less warmly.

🧠 Why it works

• We judge brands similarly to how we judge people.

• When we’re judging others we look at two aspects: their warmth and their competence.

• When someone gives us something without expecting anything in return, we consider it a communal relationship, where we feel responsible for one another’s welfare.

• We perceive people acting in a communal way to be warmer.

• When we consider a brand to be warmer, we have a better opinion of it.

🎁 Fun insights on building customer anticipation

We’re just wrapping up a research project commissioned by the International Spa Association on how to build satisfaction and positive anticipation before customers even start their spa treatment.

Some of the insights are applicable to many more businesses than only spas, so I thought I’d share 3 of my favourites:

1. Pre-visit rituals boost enjoyment. Guests who performed a simple ritual before their visit (e.g. a guided breathing exercise sent via email) rated the experience as up to 41.4% more enjoyable.

2. Remind customers they’re “members”. When customers create an account or log in, actively remind them they’re “members”. This can make them feel up to 16.6% more satisfied.

3. Signature scents create lasting memories. A pleasant ambient scent can make the customer remember the experience up to 63.6% more strongly on the next day.

And this insight we got from Prof. Markus Groth (UNSW Sydney), an expert on the topic of wait times, put a smile on my face. Thought you might like it too:

“Actual wait time does not equal perceived wait time, and simple interventions can have surprisingly strong effects. For instance, adding a mirror can reduce perceived wait time and increase satisfaction (as customers are now occupied looking at themselves).”

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✋ Limitations

• The point of profitability of using this technique may vary widely, depending on your context. For instance:

  • If you sell tap water filters - a frequently repurchased item - this tactic will likely bring long-term benefits, as customers stick to you as their supplier

  • If you sell microwaves to end consumers, even if you delight customers with a “returnless return” they are unlikely to need more microwaves from you anytime soon

• The research didn’t account for fraudulent customers, or those trying to “game the system” which would likely impact the brand’s profitability, especially as a returnless return policy grows more popular or a brand becomes known for it. It’s best to have an anti-fraud mechanism in place.

• The study focused on low to medium-priced items (e.g. pens, candy, sweaters, groceries). The effect likely works the same for higher-priced items, but this hasn’t been tested. It’s likely that allowing people to keep expensive items while receiving a refund would be too costly.

• Though the effect works best when people are encouraged to donate unwanted items, if people then throw away the items, it’s likely to have a negative environmental impact.

👀 Real-life example

Stationery store Atlas Stationers offers returns for up to 30 days for all products in their original packaging.

❌ Issue: All items, including inexpensive items like erasers, sharpeners and pencils must be returned, with the cost of return shipping deducted from the refund issued to customers.

✅ Solution: Atlas Stationers could make their returns policy more customer-friendly by:

• Allowing customers to keep the item they’re dissatisfied with if they fall below a certain price threshold (e.g. allowing customers to keep a $6 stationery set but requiring a $36.99 fountain pen to be returned).

• Telling customers they can keep their returned items for environmental reasons (save on additional shipping) or encouraging them to donate them to local charities (e.g. “ We know you aren’t happy with your item, but please donate it to a local school or library so someone can use it”)

• Absorbing the $5.99 return shipping fee instead of deducting it from the refund issued

• Providing customers with refunds instantly when they register their return and refunding the full amount, instead of deducting the return shipping fee.

• Cross-selling by highlighting products a customer might be interested in valued at roughly the amount being refunded to them when they start the return process.

• Making sure their returns policy is consistent for normal and promotional items, especially during flash sales and limited-time offers.

🔍 Study type

Online experiments and field experiment (102 orders from an online-ordering snack startup).

📖 Research

Just Keep It: When and Why Returnless Product Returns Foster Brand Support. Journal of Marketing Research (April 2025).

🏫 Researchers

• John P Costello, University of Notre Dame.

• Christopher Bechler, University of Notre Dame.

Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

🎁 Bonus mini-insight

Check your knowledge from previous insights (for paid Platform members only). Read the full insight here if you are already a member.

🎓 Insight: Complaints: When to use empathy vs explanations

📈 Recommendation: When customers complain about your brand online, use empathy and understanding for complaints that have a sad or disappointed tone, and use explanations for complaints with an angry tone. This will make the complaints less likely to go viral

✋ Careful: If the complaint comes from a prominent member of a group (e.g. top poster or a group admin on a customer group), be extra careful and try to take the discussion private as quickly as possible.

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🎓 It took me, a PhD analyst, and a marketing pro 13 hours to accurately turn this 19-page research paper into this 3min insight.

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