Today, research from payments platform Laybuy reveals the damaging costs incurred from sky high customer returns in the UK retail sector at Christmas.
New research from Laybuy reveals that in the Christmas period of 2017, retailers lost on average a staggering £2.2 billion due to the total number of items returned to retailers and the cost to process each one. This number equates to just over four days trade for UK retailers. As a result, Laybuy is renaming today, 5 December 2018, Revenue Returns Day; the first day in December that retailers can expect to make a profit.
The average returned purchase in the UK passes through seven pairs of hands before it is relisted for sale. The cost to process a return is on average 30% of the purchase price, Laybuy can reveal that during last year’s Christmas trading period, the processing costs alone amounted to an average of £510 million.
Gary Rohloff, co-founder and managing director of Laybuy, said: “Four days of no revenue would be bad news for any business, but for UK retailers feeling the pressure like never before, this new research must be a bitter pill to swallow. Retailers must take heed of this data and act fast to find alternative ways to offer flexibility to shoppers, to safeguard future revenues.”
Laybuy, the risk-free payments platform, launches into the UK market early 2019 following its success in New Zealand and Australia. Despite launching in New Zealand just 18 months ago, 6.5% of the country’s voting population has already signed up to the company’s platform.
The company has forged partnerships with 3,000 plus online and physical stores. Retailers partnering with Laybuy have seen an average increase in order value of 60%, an average increase in online and instore conversion rates of 50% and an average increase in new customer acquisitions of 30%.
The formula of six automatic weekly payments was chosen after careful study and analysis of millennial budgeting and financial planning habits. Research recently commissioned by Laybuy and conducted by Censuswide with 2,500 consumers across the UK revealed that, on average, 31% of consumers manage their money weekly, with 29.5% of those specifically in the millennial category choosing to budget on a weekly basis.
With Laybuy absorbing all credit risk on any transaction, retail partners are totally safeguarded, receiving full payment for purchases from Laybuy at the point of purchase.
Upon completing an Experian credit check, subject to their score, shoppers are able to set up a credit account of between £60 and £600. Purchases can then be made up to the value of that limit and should users wish to exceed that limit, the difference can be paid in cash.
The platform’s maximum credit limit of £600 and the Experian credit check have been put in place to ensure its responsible use. Users who fall behind on their payment schedule will also see their accounts immediately frozen.