Loop Debuts Tool to ‘Offset’ the Cost of Returns

Loop has debuted a solution to help merchants offset the cost of returns and reverse logistics.

Dubbed “Offset,” the solution lets brands offer their customers the chance to pay a small upfront fee during checkout in exchange for free returns later, the company said in a Wednesday (Sept. 25) press release.

“With the rising costs of returns and reverse logistics posing significant challenges for brands, global retailers like H&M, Zara, and ASOS have shifted away from free return policies,” Loop said in the release. “In fact, over 60% of merchants today charge a return fee in an effort to recover the costs of managing returns.”

Offset, the release adds, gives merchants a way to deliver profitability and customer satisfaction at scale, helping reduce friction and dissatisfaction by being transparent about return fees up front.

PYMNTS spoke last month with Loop CEO Hannah Bravo about the issue of returns fraud, which cost American merchants an estimated $101 billion in 2023.

“The tightening economy has led to consumers getting creative when it comes to returns fraud, and online shopping is just making it easier,” Bravo said. “Along with this, the intent to use items only temporarily and dissatisfaction with product quality are also driving factors in the rise of policy abuse.”

This behavior, Bravo added, “might be a reaction to overly lenient returns policies that were prevalent during the eCommerce boom and the pandemic, when companies prioritized shopper convenience over profitability.”

But in spite of its financial toll, Bravo said returns fraud offers a major opportunity for both brands and solution providers.

“Returns fraud and policy abuse have become difficult behaviors for retailers to prevent, turning into a major drag on many brands’ margins and contributing to major financial losses,” she told PYMNTS.

For companies like hers, this means taking the opportunity to deliver comprehensive fraud prevention solutions, Bravo said, underlining how Loop’s platform offers integrated tracking tools, advanced analytics and automation to help retailers address fraud more efficiently.

Meanwhile, PYMNTS spoke with Catherine Dummitt, vice president of marketing at Narvar, about the ways retailers are turning the pressure from the costs associated with returns into an opportunity for growth.

“Making returns as smooth and consumer-friendly as possible is crucial for retaining customer loyalty and fostering repeat purchases,” she said. “Implementing options like in-store returns, drop-off points, and box-free, label-free returns can significantly enhance the customer experience.”