Beat the challenge of refunds with Pay by Bank
Well-executed refunds are essential to world-class customer experiences. As rising costs force many businesses to abandon free returns, inefficient processes are impacting the buying choices consumers make. There is a way forward, though – here's how Pay by Bank can help protect consumer spending while reducing costs.
An estimated 30% of UK consumers now spend less online because refunds take too long.
54% of online retailers surveyed in the UK say they are, or expect to be, forced to stop offering free returns as a result of the current economic climate.
Using a real-time payment method like Pay By Bank can minimise costs associated with the refunds process.
Slow refunds are never ideal, let alone against the backdrop of the current macroeconomic climate. Delays in refunds – caused by inefficient returns and refund processes – are starting to show that consumers struggling with cashflow buy less. Our latest research indicates that almost a third (30%) of UK consumers are spending less online, partly because refunds take too long and they’re worried about their bank balance. Similarly, over half (52%) state they’re less likely to shop with a retailer again if a refund takes a long time to receive.
What does this mean for businesses?
Retailers are anticipating a difficult year ahead, with many struggling to handle rising costs and falling sales. In our recent survey of UK online retailers, four in ten (40%) retailers are focusing on cutting costs as a result of the current economic environment. One area that appears to be a particular drain on business is returns. Over half (54%) of online retailers say they are – or expect to be – forced to stop offering free returns as a result of the economic climate.
Particular pain points for merchants include the cost of processing returns (43%) and the length of time that it takes for a customer to get their money back (40%). But with the returns process being a key differentiator for consumers, online merchants risk adding even more friction to the experience and damaging customer relationships by charging for returns.
The silver lining
Though the struggle with the cost of returns is ongoing, some merchants already see the light at the end of the tunnel. A significant number of forward-thinking retailers understand that getting refunds right is an essential part of improving the returns process – for both shoppers and merchants. Over a third (36%) believe that instant refunds would enhance the customer experience of returns. And, 32% feel instant refunds would ultimately reduce the overall returns cost for their business.
It’s clear that there is considerable appetite from online merchants to overhaul the refunds process. Four in ten (39%) online merchants would like to see the cost of handling refunds reduced. One in three (33%) would value a payment method that offers real-time refunds to customers when they return an item.
The good news for merchants, as well as consumers, is that a payment solution supporting instant refunds exists – Pay by Bank. A real-time payment method, Pay by Bank helps merchants improve the speed and security of their refunds, simultaneously ensuring smooth, fast UX for consumers. In other words, a customer waits seconds, not days for their refund to deposit in their bank account.
How Pay by Bank helps businesses meet the challenge
By removing cost and hassle from the refunds process, Pay by Bank holds clear advantages for retailers to secure valuable revenue and repeat business. And for customers, their money instantly refunds as soon as a return is processed, removing friction. For a walk through of how Pay by Bank has developed, take a look at our blog post on the ways Pay by Bank adoption is accelerating.
Ready to leverage Pay by Bank and optimise your service? We’re happy to help – get in touch here.
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