Cancellation & Return Policies Impact Purchase Desire

One of the most significant impacts of the coronavirus shutdowns was the cancellation of events, travel plans and flights. Many brands had to strategize new policies on the fly, as consumers scrambled to reschedule, postpone and cancel. Additionally, simple tasks like returns at stores became more difficult as retail stores closed or sought to maintain social distancing by suspending in-store returns. 

With the emergent cancellations and policy changes required by COVID-19, consumers are afraid of losing money and shy away from relying on businesses and services with inflexible cancellation policies. At the same time, consumers appear very understanding about the circumstances businesses are facing. Likewise, consumers expect brands to be understanding and kind in return. Cancellation and return policies can be integral parts of how consumers perceive brands and offer opportunities to create positive consumer experiences and engagement. How brands have handled cancellation and refund policy changes so far and business plans to permanently amend policies going forward could impact how brands are perceived in the long term.

The Travel Industry Must Deploy Effective Strategies When It Comes To Trip Cancellations And Postponements

How travelers booked their trips could impact how the cancellation or postponement is handled. According to travel media brand Afar.com, sites like Expedia and Priceline can act as middlemen in some circumstances, but in other cases have to defer to, for instance, airline or hotel policies. However, most online travel agencies (OTAs) have allowed travelers to cancel hotel reservations through May 31. Travelers may feel more satisfied with their options when OTAs are upfront about what services they can and cannot provide.

For travelers who booked through tour operators, they will generally have the option of postponing or receiving credits for future travel. The financial burden for many of these companies makes outright refunds unlikely, although some have offered refunds on trips that the tour operators themselves were required to cancel. 

For boutique brands, like tour operators, the opportunity remains to remind customers of their brand value via reassuring communications that contextualize the need for a postponement and emphasize the brand’s quality service. Ongoing emails about the upcoming rescheduled trip or voucher status can be positive ways to create engagement with consumers, and aligned content marketing strategies — blogs about planning ahead, options in the event of future disruptions, and fun travel content — can also be beneficial during crises.

While hotels and airlines aren’t reacting monolithically to the required cancellations, most are offering some combination of refunds and credits. The trickier party will come when travel resumes. A reluctance to change cancellation and refund policies after the pandemic is over could lead to a boon for travel insurance companies, as it’s likely that many travelers won’t want to risk losing their money in the event of regional or global shutdowns.

Many Retail Brands Extend And Amend Return Policies During Pandemic

For big box brands like Target, suspending in-store returns is an efficient way to eliminate unnecessary lines and additional people in the store. The brand extended their return window by three weeks for customers whose return period expires while returns can’t be made in the store. Kohl’s, Gap and other retailers have followed with similar policies. 

Liberal return policies have also taken hold with digital brands who know that people may be reluctant to hit the post office. Amazon extended their return time, and insiders predict other digital brands will do the same. “This was smart from a customer service and operational perspective, as it takes a lot of labor to process online returns. A lot of online retailers will follow suit, either formally or informally, as a way to reinforce customer service,” said Liesl Chang, Co-Founder of returns solution Cricket. “[Brands] know that folks don’t want to trek to the post office or UPS store ... and want to have an empathetic stance.”

As stores reopen, a significant influx of returns is expected, because people are finally able to physically make the returns and because there may be many people tightening their belts. A study in 2018 on what consumers expect when it comes to returns found that 96% of shoppers would return to retailers that made returns easy or very easy. Understanding that consumers’ finances and priorities may be different post-coronavirus than they were before the health crisis, online and in-store brands should make sure they’re providing seamless, efficient returns with transparent policies that include extra consideration for the unique circumstances of customers.

There will be a return to some version of normal in the near future, but consumer expectations may be different. Many consumers' experiences during the pandemic may shape how they feel about certain brands and retailers. What brands do to shift policies in ways that are beneficial to consumers during this crucial time could have lasting resonance post-COVID-19. 

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