How Companies Deal With the Internet Return Rate

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Dec. 26 (Bloomberg) – WSL Strategic CEO Wendy Liebmann discusses the impact of returns on online retailers on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Purchases we should specify, at purchases we should specify, at least by one estimate, returned.

Least by one estimate, returned.

How do companies deal with this?

How do companies deal with this?

That is not an unusual that is not an unusual number.

Number.

This year perhaps more unusual this year perhaps more unusual in a sense that there has been a in a sense that there has been a lot of off-line shopping -- lot of off-line shopping -- online shopping going on.

Online shopping going on.

Amazon in general, when it comes amazon in general, when it comes to clothes and shoes, they have to clothes and shoes, they have a high return rate because a high return rate because people just by multiple payers people just by multiple payers to see what fits and then they to see what fits and then they send it back.

Send it back.

Reasonable shipping policies, reasonable shipping policies, return policies, then people return policies, then people feel they can bring in what they feel they can bring in what they want -- want -- i know somebody who does i know somebody who does that.

That.

I will not mention names.

I will not mention names.

I will give myself up right i will give myself up right here because i ultimately will here because i ultimately will by multiple sizes.

By multiple sizes.

They all have different size they all have different size standard.

Standard.

Such a nuisance -- such a nuisance -- not if it is a not if it is a brick-and-mortar store across brick-and-mortar store across the street from the office.

The street from the office.

You have sent -- you have sent -- to my house, i try it on when to my house, i try it on when convenient and then i can return convenient and then i can return it.

It.

this is exactly what a guest this is exactly what a guest was talking about, the different was talking about, the different permutations.

Permutations.

You can buy it online, pick it you can buy it online, pick it up in the store, have it sent -- up in the store, have it sent -- 81 permutations.

81 permutations.

I would argue i am a pretty i would argue i am a pretty valuable customer.

Valuable customer.

I make a lot of purchases -- i i make a lot of purchases -- i make a lot of returns but i buy make a lot of returns but i buy more in general.

More in general.

Is that the case always?

Is that the case always?

Not always.

Not always.

Some people think they are going some people think they are going to be smart and try it on first to be smart and try it on first and should them back.

And should them back.

-- ship them back.

-- ship them back.

But in some cases like you, they but in some cases like you, they are great shoppers, very loyal.

Are great shoppers, very loyal.

And they don't know what is the and they don't know what is the right size and they don't want right size and they don't want to make a mistake him a so to make a mistake him a so liberal -- mistake, so liberal liberal -- mistake, so liberal shipping policies, why not slap shipping policies, why not slap the label back on them and ship the label back on them and ship them back?

Them back?

The past five or 10 years the past five or 10 years gift card have become huge.

Gift card have become huge.

Are they huge now or with all are they huge now or with all the discounts and the ability to the discounts and the ability to get stuck over the internet, do get stuck over the internet, do people come back to goods?

People come back to goods?

They are still top items for they are still top items for a variety of reasons.

A variety of reasons.

Mom and dad and grandparents, mom and dad and grandparents, nobody knows what to buy nobody knows what to buy anybody.

Anybody.

Last minute, running out of last minute, running out of time.

Time.

People buy what they want.

People buy what they want.

Talk about the different talk about the different return policies the different return policies the different stores.

Stores.

The gap, they started tightening the gap, they started tightening it to 90 days -- i am pretty it to 90 days -- i am pretty familiar with it.

Familiar with it.

[laughter] [laughter] the calculus of tightening your the calculus of tightening your return policy, doesn't have an return policy, doesn't have an effect on the numbers or is it a effect on the numbers or is it a case that bloomingdale the case that bloomingdale the nordstrom's know people go there nordstrom's know people go there because of the very generous and because of the very generous and liberal return policy?

Liberal return policy?

It is that.

It is that.

A liberal return policy, you a liberal return policy, you feel more comfortable.

Feel more comfortable.

You take it back, not a big you take it back, not a big issue.

Issue.

You feel safe.

You feel safe.

The challenge is it costs money.

The challenge is it costs money.

When business gets tough, like when business gets tough, like you did for gap, they started to you did for gap, they started to be tighter with their return be tighter with their return policy.

Policy.

It is all the economics of it it is all the economics of it all the time.

All the time.

I remember when nordstrom was i remember when nordstrom was the "it" lace for service and the "it" lace for service and almost seems like everyone has almost seems like everyone has to offer that service.

To offer that service.

Amazon, ebay, etc.

Amazon, ebay, etc.

There are so many places i there are so many places i can buy in-store and online -- can buy in-store and online -- the economy is still struggling some, but anyway you can get people to come in the door on the computer to buy is an incentive.

You have the returns back and forth, how the managed inventory?

It is a huge challenge.

If you buy online and then taken back to the store, how do you manage inventory?

Unique systems that are much more sophisticated to let you know where things are so that you can move things around -- you need systems that are much more sophisticated.

We couldn't see this level and activity without the computer systems that exist.

Was not possible 10 years ago.

Absolutely true.

You needed for the unified computer system.

Wendy liebman, our guest host

This text has been automatically generated. It may not be 100% accurate.

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