Händlerbund: Product Returns Study 2016

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This article is published by our German National Association Händlerbund

For the full study, please click here.

The Händlerbund, within the framework of its international Fair Commerce Initiative, asked 856 online traders about their experiences with customer returns. Because lawmakers for online traders in the European Union have specified comprehensive laws and obligations, the trust of online traders, in many cases, lies in the fairness of their customers. The results of the Product Returns Study 2016 shows, how consumers sidestep the right of withdrawal in online trade.

A loss-of-sales of around 17 % due to damaged returns

When asked about the instances in which a package was returned with damaged original packaging, 75 percent of the online traders surveyed said they had had to deal with the problem. Every fifth return (21 %) is damaged in this way and closer to half of all the returned goods cannot be resold at the original price. As a consequence the online traders are forced to reduce the price by (on average) 35 percent. Especially affected areas are electronics (36 %) and textiles (21 %). Triggering further annoyance, many clothing orders are returned worn and with the tags missing. Regarding textile returns, it was revealed that an average markdown of 42 percent was required. These concerned every second piece of clothing that was returned. The estimated loss-of-sales through depreciation is around 17 percent.

Händlerbund calls for the amendment of the Consumer Rights Directive

Online traders seldom have a legal way to handle this problem. Although demanding compensation is possible, in this situation, the online trader must prove that abuse of the right of withdrawal has occurred and to verify that the goods have been used or damaged. At this point, in the view of the Händlerbund, this is a situation the lawmakers need to remedy. For this reason, the Händlerbund will bring the results of the study into political circles and, at the review of the Consumer Rights Directive in December of this year, to the European Commission. The Federal Chairman of the Händlerbund, Andreas Arlt explains: “The study shows above all the problem that goods are returned damaged or dirty, as well as with missing or damaged original packaging. Concerning these issues, the Händlerbund sees the potential for improvement and will bring the results into political circles. Our goal is to strengthen fair competition and, consequently, to further develop the entire e-commerce branch.”

Legal Uncertainty and an Insufficient Sense of Duty

For online traders and consumers alike, the circumstances under which a withdrawal can take place, remain unclear after the results of the Product Returns Study 2016. Along with legal uncertainty, the following problem areas concerning the right of withdrawal have arisen:

  • Goods were declared as faulty and the return costs were transferred to the online trader.
  • With any resistance on the part of the online trader, the customers awarded them with negative reviews.
  • In 35 cases, the online traders actually reported attempted fraud – less valuable duplicates of the item ordered were returned.

The European Commission has enacted the Consumer Rights Directive for all distance selling business. The new, Europe-wide, standardized, 14-day right of withdrawal was supposed to support e-commerce. Even when making purchases over the Internet, consumers should, just as they do in bricks-and-mortar shops, have the right to examine and test the goods. The results of the Product Returns Study 2016 shows, that a general legal uncertainty exists in distance sales, and that fairness in online trade is in need of further strengthening.

For the full study, please click here.

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