Will shoppers pay services to do returns for them?

Discussion
Source: ReturnRunners; Photo: RetailWire
Dec 07, 2017
Tom Ryan

For a flat fee of $9.99, ReturnRunners returns any single item for a consumer. Additional items cost 99 cents each.

Users download the ReturnRunners app and create a profile. The app matches the user with a local Runner, who picks up the merchandise at a specified time and returns it on their behalf. The money is returned to the card it was purchased with.

“We make your returns. You do more important things,” the Chicago-based on-demand service states on its website.

Users are required to take a photo of their receipt for proof of purpose. ReturnRunners works with about two dozen stores, including Nordstrom, Target, Neiman Marcus and Sephora.

Founder Fara Alexander came up with the idea while planning her wedding. She wound up purchasing many items just before stores were closing but wasn’t able to return most of them.

“While I had good intentions to make it back to the store, it was really low on the priority list,” she told Chicago Tonight. “All this wasted money I could otherwise have had if there was some easier way to go about this process.”

The company plans to expand to other major metropolitan markets and believes the service could also support in-store pickup.

Another upstart launching a similar service is ReRunner. On its gofundme page, ReRunner writes, “This benefits the consumer by putting more disposable income back in their pockets, and more valuable still, ReRunner eliminates the hassle of customer service lines, giving consumers back their most valued commodity — time.”

In London earlier this year, retail delivery and returns specialist CollectPlus partnered with on-demand transport app Gett to launch a retail returns service. The service costs £1.95 per item.

UberRUSH rolled out returns in 2015 in New York City for e-commerce purchases to help consumers avoid the chore of standing in line at the post office. The service, which cost $4 per pickup, was only offered for a limited time. UberRUSH at the time said that it couldn’t handle in-store returns because they require additional proof of purchase.

DISCUSSION QUESTIONS: Do paid, on-demand return services make sense for today’s consumers? Is the in-store returns process too complicated for on-demand delivery platforms to handle?

Braintrust
"The pivot for a company like this would be to focus on a niche market of higher-end users and not try to make this a mass market play."
"What’s next? Do my dishes for 5 bucks? If you’re the slightest bit organized, doing e-commerce returns is NOT that hard."
"...this on-demand service is addressing a highly specific need, not a frequent one. "

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26 Comments on "Will shoppers pay services to do returns for them?"

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Dave Bruno
BrainTrust

If ReturnRunners can make this business model work at $10 a return, more power to them. I for one, however, am skeptical. Most shoppers hate — and many flatly refuse — to paying shipping fees for items they want and often can’t wait to receive. I can’t imagine large numbers of these impatient but frugal shoppers will fork over $10 for help returning something they don’t want.

HY Louis
Guest
1 day 2 hours ago

I am in agreement with Mr Bruno. In my opinion this would affect very few shoppers who have substantial returns with high values. Otherwise donate the item to the poor or re-gift at a white elephant party.

Ken Lonyai
BrainTrust
Return services address a consumer pain-point but few shoppers will be willing to pay any substantive fee. Free shipping is largely the norm because consumers do not want to pay delivery costs. A return service is in effect a reverse delivery service. Although time is money, the majority of shoppers are not going to pay $9.99 to have an item returned. Sure, for a bunch of engagement/wedding gifts from a registry in one store, it makes much more sense. The best scenario for stores is to drastically streamline the return process and even reward/compensate shoppers in a small way for… Read more »
Charles Dimov
BrainTrust
“Returns” is the most hated word in retail. Nobody likes them, but they are a key and important part of the sales cycle. Making returns as easy, clear and hassle-free for customers as possible makes it much more likely that they will buy a product from your retail brand. Get it wrong and they just won’t buy from you. What this service does is give shoppers even more options, making the return easier and quicker than ever before. For retailers, this new option means they will not necessarily get the benefit of having the shopper buy another product when making… Read more »
Phil Masiello
BrainTrust
The number one reasons startups fail is a lack of a market. The second reason is not having a sustainable economic model. I am a founder of five startups and I mentor startups at a university and business incubators. I look at this as a product with no market and economics that are not scalable. Think about this. If you are going to pay someone to stand in line and execute a return for a customer, how much does that person get paid? Let’s assume $15 per hour. It has to take at least an hour with pickup, transport and… Read more »
Neil Saunders
BrainTrust

This may appeal to some consumers who are time poor and cash rich. However, I cannot see the majority using it.

It’s a handy service, but given that the average value of a return in, say, apparel is around $32, the $9.99 fee represents almost one-third of the purchase price. That’s not exactly good value for money.

If the item being returned is much more expensive, it is likely that the consumer would be much more willing to go to the store to get a refund.

In this sense, I fail to see how the logic of the service stacks up.

Kevin Graff
BrainTrust

Keeping in mind that you can’t be all things to all people, there’s a decent business model here for ReturnRunners. True, there’s a large portion of consumers that won’t be willing to part with $10. Then again, there’s a large number of consumers who don’t shop at Nordstrom or Neiman Marcus either.

For that ever-spending group of consumers who value their time as much as their money, ReturnRunners-like concepts are likely to be welcomed with open arms.

Lee Kent
BrainTrust

A good return service would be welcome but I’m afraid this is not it. It’s too costly per-item for most consumers (of course there will be a few who will be takers). My vision sees drop-off points in the returns service model. Convenient to get to and yes, with an app to make the process faster and easier but with no middle man. And that’s my 2 cents.

Nir Manor
BrainTrust

As said here already, I believe it is a much needed service for a specific type of shoppers. I was thinking about online returns. Do they handle them as well or do they just handle returns for physical stores? Online could be a more interesting niche.

Chris Petersen, PhD.
BrainTrust
If time is money, ReturnRunners could be a winner for consumers. The $10 charge seems like a bargain when you calculate your time to pack up the items, drive to the store, stand in line and then complete the paperwork. Of course the value of the service depends on the price of the item returned. But if it seems too good to be true, then there are probably business challenges. How will the modest charge pay for all the runner’s time and transportation costs? How will the runner accommodate packages that are larger than will fit in their vehicle? The… Read more »
Bob Phibbs
BrainTrust

Another example of VC money chasing “mommy” services. If they won’t pay $9 to have it shipped to them, why would consumers pay that or more to return it? #RetailFail

Meaghan Brophy
BrainTrust

To echo what others have noted, if consumers won’t pay $5 for shipping, why would they pay $10 for returns? How will ReturnRunners get enough business for this to be profitable? As someone who absolutely hates making returns, on a surface level the concept sounds appealing but, in reality, just doesn’t make sense for most consumers or as a business model.

Cate Trotter
BrainTrust
The sensible thing about these services is that they seem to understand that in order to provide value to the customer they need to pick up items from their home — if you have to take the item to someone then what’s the difference to taking it back to the store? The downside is that these services also fall victim to the biggest annoyance of home delivery — being at home to give the parcel to someone to return. The 8 a.m. to 5 p.m. delivery time slot is a source of real frustration for customers, so these services can’t… Read more »
Joy Chen
BrainTrust

It is a good idea for the consumer because returns are inconvenient chores. However, this on-demand service is addressing a highly specific need, not a frequent one. Additionally, for a charge of $10, it will further limit the returns to higher cost items. The model will get less interest and less frequent use than Postmates.

The on-demand returns service is not too complicated, but I’m not sure it will have enough scale to be profitable. It may be a good idea for this to be a niche opportunity captured by Uber instead of a standalone business.

Kim Garretson
BrainTrust

Task Rabbit has offered this service for a long time. I wonder if the motivation here is that with the Task Rabbit acquisition the bet is that Task Rabbit will discard unprofitable services such as this one?

Shep Hyken
BrainTrust

I’m not sure how viable the business model is at $9.99/return, but I like the concept. There are similar services, so it’s not brand new. In the age of customer convenience people will be willing to pay for this service, and it wouldn’t surprise me if the Ubers of the world jumped in on this.

Sterling Hawkins
BrainTrust

All part of this sharing economy. I think it’s a good idea that will have to evolve to be truly valuable. Focusing on returns for a $9.99 fee is too much of a niche market. It will be interesting to watch how this business grows over time as there’s a larger opportunity in the space after TaskRabbit was picked up by Ikea.

Lee Peterson
BrainTrust
What’s next? Do my dishes for 5 bucks? If you’re the slightest bit organized, doing e-commerce returns is NOT that hard. I understand that the blue ocean space for innovation and start ups is identifying consumer “pain” and certainly, after Christmas returns will be a form of that, but I’d be surprised if this one works. It’s just not big enough and too strained on the process side to work. Perhaps on the Upper East Side of Manhattan or in Westchester County but, otherwise, the broad swath of consumers don’t want to pay for shipping, why would they pay for… Read more »
Ken Morris
BrainTrust
Consumers are time-starved and merchandise returns are a dreaded task. Nobody enjoys waiting in long lines to return a purchase and if the product was purchased from a known associate, returns are often an uncomfortable experience. Many consumers would gladly spend $10 for someone to do their dirty work for them to save time and avoid frustrations. Store and online sales are both a challenge — consumers might even pay more to have someone handle the omnichannel return process; authorization, partial order returns and follow-up on credit received. These are complex processes for which many consumers will pay to be… Read more »
Ralph Jacobson
BrainTrust

This opportunity has a lot to do with demographics. Many affluent areas may have little demand for this service. While urban, more blue-collar neighborhoods will definitely have an interest in this, especially following the holidays. Cost to the consumer will have to be weighed, as there may need to be more incentives added to make the offer more compelling long-term.

Paul Donovan
BrainTrust

I don’t know if the market will materialize for this service but if you told me a few years ago that I would pay almost $10 (fee + tip) for a local restaurant delivery versus me picking it up I would have said no way! However I have found myself using Doordash and Amazon Restaurants frequently …

Cristian Grossmann
BrainTrust

The maddening inconvenience of returns, especially during the holidays, would make a flat rate, on-demand service like ReturnRunner very intriguing to consumers. The problem is, as the “share economy” begins to hit a critical inflection point, the dangers of unsustainable pricing are becoming increasingly apparent. Once customers use up inevitable coupon and referral codes, a business like ReturnRunner may have trouble retaining customers beyond retail-heavy seasons or special events like weddings.

Rich Kizer
Guest

No! I know some returns can be a problem, and some returners can be a pain. From a retailer point of view, if a return is made, I would want the chance of offering exchanges, alternatives or securing another sale, and perhaps making a disgruntled customer happy. I’d never get that chance with a Return Runner! The biggest associate training point for post Christmas: DO NOT immediately say “would you like your money back?”! Everyone tries to teach associates to be ready with ideas, alternatives, suggestions, and knowledge to save a sale, and perhaps save a customer….

Peter Luff
BrainTrust

Free shipping is the norm. I cannot see this model flying long term. Most customers expect free delivery and free returns. Retailers who don’t manage this aspect are going to catch a cold, so will address this gap and make this service irrelevant.

Doug Garnett
BrainTrust

Too many retail “innovations” appeal to increasingly narrow slices of consumers. And most often that’s urban dwelling, higher income consumers who wax poetic about things like having someone return things for them or same day deliveries.

Perhaps there’s a niche for this team among upscale, urban dwellers. But consumers have made it clear they don’t want to pay $4.99 for shipping — why would they pay $10-$20 to return things?

Expectations for services like these need be kept in check.

Kenneth Leung
BrainTrust

I think only a small niche of customers with expensive items would use the service. If you are returning a big screen TV and you don’t have a vehicle to carry, I can see paying $10 for it, otherwise I don’t see it having mass appeal.

wpDiscuz
Braintrust
"The pivot for a company like this would be to focus on a niche market of higher-end users and not try to make this a mass market play."
"What’s next? Do my dishes for 5 bucks? If you’re the slightest bit organized, doing e-commerce returns is NOT that hard."
"...this on-demand service is addressing a highly specific need, not a frequent one. "

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