The move is a big upfront expense on Apple's part, but could pay off
in the long run if the company can lure online customers away from
retailers such as Amazon.com Inc and Best Buy Inc, industry experts
According to retail-intelligence firm StellaService, customers who
buy a product from Apple's online store can get a refund in under a
week, versus 10 days previously.
Apple is processing refunds at a faster rate because the company now
uses an expedited service, FedEx 2Day, to let customers ship
returned items with prepaid labels to its warehouse in three days.
StellaService researchers first noted the improvement in refund
processing times in November, but chalked it up to a temporary
measure for the busy holiday season. The company, which orders items
from Apple's website several times a day for research purposes, also
discovered that packages were stamped with FedEx 2Day, rather than a
Newgistics prepaid label.
A source with knowledge of the new procedure confirmed that
customers will incur no additional cost.
"This is the first time we're seeing an investment like this on the
returns side," Kevon Hills, StellaService's vice president of
research, told Reuters.
StellaService does business with Amazon-owned Zappos, but declined
to disclose whether its customer base included Apple, Amazon or
Amazon remains the frontrunner in online retail, but the race is
heating up. Trade publication Internet Retailer estimated that Apple
recently took the No. 2 spot from Staples in worldwide sales. These
rankings do not include sales by third parties.
Apple experienced a 24 percent increase in online sales to $18.3
billion in 2013, Internet Retailer estimated.
E-commerce experts say Apple prides itself on its customer service
and believes in controlling every aspect of its business.
[to top of second column]
"Speed is becoming a significant competitive weapon" in the
e-commerce wars, said Marc Wulfraat, president of MWPVL
International, a logistics and supply chain consulting firm. But
most e-commerce firms do not invest in making the returns process
more efficient, as it does not serve the bottom line.
"Returns are viewed as a hidden cost, so many e-commerce companies
make the process very difficult," he added. "Returns are the first
place to cut corners."
Apple rival Amazon offers instant refunds in some cases. However,
this puts the company at risk for fraud, as some customers may not
actually return the item. By cutting down on the days an item is in
transit, Apple can offer a speedier refund and avoid fraud.
Amazon spokeswoman Julie Law said the company does not comment on
Apple spokeswoman Amy Bessette said the company had no comment at
FedEx declined to speak publicly on customer agreements.
(Editing by Jan Paschal)
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