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PayPal and Shopify See Big Business in Returns. Merchants Want to Fix the Problem Themselves

By  |  Feb. 16, 2023 6:08 AM PST
Photo: Photo by Getty.

Thanks to Amazon, shoppers have grown accustomed to easy, free returns. That’s created a headache for small online sellers, who have been increasingly struggling to shoulder the cost.

Several software and payments companies, including PayPal and Shopify, are trying to help. They offer services to help brands salvage revenue by convincing shoppers to swap out purchases or buy something else instead of requesting a full refund. Their pitch to online sellers is they need these services to better compete with Amazon.

But merchants want to avoid using these services in the first place. Lately, direct-to-consumer sellers have tried another tack: figuring out how to cut down on their return rates themselves. Jones Road Beauty, a cosmetics brand launched by makeup artist Bobbi Brown in 2020, has leaned on customer data to guide shoppers toward items they’re more likely to keep.

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