Analysis of E-commerce Returns in Online Retail

In 1991 after the National Science Foundation lifted the ban on commercial usage of the internet, e-commerce through online retailers has slowly been growing in sales along with e-commerce returns. As e-commerce returns increase alongside e-commerce sales, this thesis will explore what problems online retailers experience from e-commerce returns and what are some potential solutions. Building on existing work conducted by other researchers on the topic of e-commerce returns, additional interviews were conducted with Nordstrom and Big Lots to compare those findings with external research. From interviews and additional research, it is concluded that the biggest problems online retailers experience returns due to size, fit, color, and damages. Thus, it is recommended for online retailers to implement tools such as Fit Finder or incorporate more diverse models along with more detailed descriptions to alleviate returns due to sizing or fit. Furthermore, invest in providing higher quality images to better depict product coloring. As for damages, it is recommended to establish 2nd tier resale channels or a chargeback program onto 3rd party carriers to recuperate losses. Overall, further investment into reverse logistics is pertinent for an online retailer’s e-commerce strategy and operations to remain competitive against others while controlling costs.