Cost Of U.S. Consumer Electronics Returns Estimated To Reach $16.7 Billion In 2011

While consumer electronics (CE) merchandise returns are often an overlooked scenario for consumers they are undoubtedly top of mind for manufacturers and retailers because of their billion dollar price tag. “Put another way, manufacturers spend about 5 percent to 6 percent of revenues to manage all aspects of a customer return. For retailers, returns represent approximately 2 percent to 3 percent of sales,” according to a new study put out by Accenture.

What’s more shocking is that, typically, only 5% of those returns are due to defective products. The other 95% of returns are either because of product frustration or buyer’s remorse. In the end, the items make their way back to stores in good shape but at a cost to retailers and manufacturers, the study continues.

The report, based on several Accenture surveys and a few older 3rd party studies, does offer several “prevention-based” solutions to alleviate the situation for both retailers and manufacturers alike.

And while one of the report’s major recommendations is for increasing metrics (which has a tiny element of “sales-y-ness” to it—after all, metrics and logistics are Accenture’s gig) I have to admit, it makes sense within the context of the report. Being empowered with statistics on return histories would be powerful information to have as you plot supply chain course changes. The other detailed recommendations of encouraging and empowering consumer research, creating more accurate advertisements, and developing more involved customer service routines also make sense to this blogger.

As we speed toward the holidays and the gadget Mecca that is CES, gadgets are on all of our minds for sure. Honestly, how can it be avoided when it seems like you can’t get through a single NFL game on television without being exposed to 15 mobile phone commercials that all talk about benefits, but not about of the reality of the device. It’s no wonder that many consumers are confused about what they are getting.

The paper is definitely not some Aristotelian epic but it is a quick, decent read and it brought awareness to a concept I hadn’t thought about before…nestled all snug in my insulated consumer experience. The bottom line of this report is that, in their lust to sell, CE retailers and manufacturers would be wise to do so with an eye toward preventing the return. That’s good advice.