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4 votes
Companies such as John Lewis worry

about the increasing cost of customer
returns. They see two main options:
Option 1: Charge customers the actual cost
of delivery, as would happen if items were
posted.
♦ Option 2: Continue with free delivery,
forcing shop customers to subsidise online
ones.
Justify which one of these two options a business such as John Lewis should choose. (9)

User Antnewbee
by
7.5k points

1 Answer

4 votes

Answer:

The decision of whether to charge customers the actual cost of delivery or continue with free delivery for customer returns is a complex one and will depend on a variety of factors, such as the business's overall strategy, the cost of returns, and customer expectations.

Option 1: Charging customers the actual cost of delivery for returns could help to reduce the overall cost of returns for the business. This approach would incentivize customers to be more mindful of their purchases and less likely to return items. It could also help to increase the business's revenue, as customers would have to pay for delivery. However, this approach could also lead to a decrease in customer satisfaction and loyalty, as many customers expect free delivery. It could also lead to a decrease in sales as customers might prefer to shop elsewhere if they have to pay for delivery.

Option 2: Continuously with free delivery, forcing shop customers to subsidize online ones, could help to maintain customer satisfaction and loyalty. This approach would make it easy for customers to return items, which could lead to an increase in sales as customers would be more likely to make purchases if they know they can easily return them. However, this approach could also lead to an increase in the cost of returns for the business, as more customers might take advantage of the free delivery option.

Ultimately, the decision of which option to choose will depend on the specific circumstances of the business and its customers. The business should weigh the potential benefits and drawbacks of each option and carefully consider the impact on customer satisfaction and loyalty, sales, and costs.

User Flob
by
7.0k points