The relationship between product returns and business performance of selected apparel retail stores in Cape Town, South Africa

Abstract

There is a global retail divide as to whether conventional or unconventional methods are best in dealing with product returns. Causes of such customer returns range from customer dissatisfac-tion and product fault to outright fraud. Retailers need to avoid fraudulent customer returns which are, strictly speaking, retail crime. Shop managers also need to manage customer returns in a way that benefits the chain without causing irreversible customer dissatisfaction. The main aim of this study is to explore the relationship between product returns and business performance in selected retail outlets. This hinges on understanding the causes and effects of product returns, the product returns cycle and its management, and understanding the nature of the returns policy and procedure, as well as the various participants in returns handling. The research takes a de-ductive and subjective worldview, which is more interpretive in nature and suits the exploratory study. A qualitative research approach using a case study method and qualitative data analysis (QDA) is employed. Purposive non-probability sampling was used to interview retail outlet managers in Cape Town. Raw data was transcribed, coded and themes were generated using MS Word. The main themes addressing the four research questions are retail fraud, positive and beneficial relationship, negative and costly relationship, insignificant and irrelevant relationship, parameter-bound and non-parameter-bound returns, and internal and external business factors. Essentially, the main findings of this research showed that the relationship between product returns and shop performance is largely indirect rather than direct. The findings also showed that this relationship further manifests itself in the retail outlet as positive or negative, costly or beneficial and insignificant or irrelevant. The researcher’s assessment of these findings rec-ommends that retailers eliminate returns entirely and stick to manufacturers’ warranties and guarantees, as well as issuing in-store vouchers in place of cash refunds. This is regardless of periodic reviews of the returns policy. Customers should not be allowed to take advantage of possible policy lenience. This research focused only on footwear and apparel returns, so there is a need for further study regarding other product return categories involving pharmaceutical or grocery returns, or flight ticket refunds. Despite some challenges in time constraints, personal bias, lockdown and participant professionalism, Covid19 protocol was thoroughly observed and all data was honestly reported in the light of informed consent, respect for privacy, respect for intellectual property and referencing.