# Slow refunds hurt consumers and brands alike Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-26 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Improve Customer Loyalty with Quick Refunds Meta Description: Discover how slow refunds impact customers and brands. Learn how working with the right payment merchant can enhance customer service and brand reputation. URL: https://financedigest.com/slow-refunds-hurt-consumers-and-brands-alikehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/closeup-of-cute-young-woman-thinking-and-choosing-clothes-in-clothing-shop-sbi-302735491-1736837518236-compressed.jpg) _By_ **_William McMullan,_** _Director of eCommerce at Trustly_ As more of our purchases move online, consumers are spending increasing amounts of time chasing refunds. Emails, calls and chat messages to customer service teams with questions such as _“_ Where’s my refund? _”_ and _“_ Why is it taking so long _?”_ cause [stress and frustration to consumers](https://www.financedigest.com/from-burgers-to-bleach-stressed-consumers-buy-cheap.html "From burgers to bleach, stressed consumers buy cheap") and brands alike. The pandemic has [put refund policies in the spotlight](https://www.financedigest.com/analysis-nickel-meltdown-puts-spotlight-on-lmes-search-powers.html "Analysis-Nickel meltdown puts spotlight on LME’s search powers"). Consumers who [invested money](https://www.financedigest.com/six-tips-for-saving-money-and-investing-wisely.html "Six Tips For Saving Money And Investing Wisely") in tickets, holidays or flights quite rightly wanted their money back for services they were no longer able to use. And while most [consumers have been patient with brands as they scale](https://www.financedigest.com/how-cfos-of-consumer-brands-can-create-new-value-relevance-at-scale.html "How CFOs of Consumer Brands can Create New Value & Relevance at Scale") up refund processes, that patience is wearing thin. Working with the right [payment merchant is therefore critical to businesses looking to improve their customer service](https://www.financedigest.com/igtbs-payments-services-hub-faq.html "iGTB’s Payments Services Hub – FAQ") and customer loyalty. Understanding how the refunds process impacts customers is a vital [step towards improving](https://www.financedigest.com/improving-your-it-team-in-four-simple-steps.html "Improving your IT team in four simple steps") the service. **Releasing refunds** Traditional [financial systems do not operate at the same speed as e-commerce shoppers expect](https://www.financedigest.com/what-to-expect-in-2022-financial-services-trends-according-to-salesforce.html "What to expect in 2022? Financial Services Trends, according to Salesforce"). What’s more, according to Trustly data, this disparity is placing an increased [financial burden on consumers](https://www.financedigest.com/uk-consumer-mood-hits-one-year-high-but-financial-gloom-persists.html "UK consumer mood hits one-year high, but financial gloom persists"). In the past year, more than £3.5 billion of UK shoppers’ [money has been held hostage in online](https://www.financedigest.com/how-to-earn-money-online-using-sponsored-reviews-and-blogs.html "How to Earn Money Online Using Sponsored Reviews and Blogs") refunds, with four in 10 consumers having to wait between three and five days for their money to be released. The research also highlights that the main source of these refunds comes from three major retail categories: clothes and accessories (50% of refund requests), technology (20%) and [home and garden](https://www.financedigest.com/ebbsfleet-garden-city-kent-primed-new-homes.html "Ebbsfleet Garden City In Kent Primed For New Homes") (19%). But the most [worrying finding suggests that nearly half of consumers](https://www.financedigest.com/autonation-gets-a-bumpy-ride-as-investors-worry-about-u-s-consumers.html "AutoNation gets a bumpy ride as investors worry about U.S. consumers") who’ve requested a refund in the past year (45%) have had their finances impacted by delays. This [means that they are more likely to resort to taking out loans and paying interest](https://www.financedigest.com/a-tale-of-two-central-banks-what-the-latest-interest-rate-decisions-mean-for-investors.html "A tale of two central banks – what the latest interest rate decisions mean for investors") on debts to cover the shortfall. Plus, more than a quarter (28%), said that [slow refunds had directly impacted their capacity to pay](https://www.financedigest.com/uk-recruiters-slow-pace-of-pay-growth-in-march-rec-survey-shows.html "UK recruiters slow pace of pay growth in March, REC survey shows") bills, rent and mortgage. Interestingly, the detrimental [impact of slow refunds reveals](https://www.financedigest.com/first-listener-wide-study-reveals-brand-impact-of-radio-livestream-and-podcasts.html "First listener-wide study reveals brand impact of Radio, Livestream, and Podcasts") a generational divide. Nearly one in three (29%) [consumers aged 18 to 24 admitted that having money](https://www.financedigest.com/tackling-consumer-money-woes-why-psd2-could-be-the-answer.html "Tackling Consumer Money Woes: Why PSD2 Could Be The Answer") tied up in refunds is impacting their ability to pay for essentials like food. This compares to just 5% of over 55s. **[Boosting brand](https://www.financedigest.com/sap-boosts-brand-awareness-using-gumgums-high-impact-ad-formats-and-veritytm-gumgums-advanced-contextual-targeting-solution.html "SAP boosts brand awareness using GumGum’s high impact ad formats and VerityTM, GumGum’s advanced contextual targeting solution") loyalty** When brands make consumers wait for refunds, it [puts a strain on the relationship](https://www.financedigest.com/new-research-from-impact-com-shows-shifting-power-dynamic-that-puts-influencers-at-the-centre-of-the-brand-consumer-relationship.html "New Research from impact.com Shows Shifting Power Dynamic that Puts Influencers at the Centre of the Brand-Consumer Relationship"), which ultimately hurts their reputation. The [legacy systems](https://www.financedigest.com/retailers-weighed-down-by-their-own-legacy-systems-survey-reveals.html "Retailers Weighed Down by their own Legacy Systems, survey reveals") and laborious internal processes that cause refund delays are actively preventing customer loyalty. By offering faster, more flexible refunds, retailers can help [consumers to gain](https://www.financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gain.html "Investors warn big consumer firms over price hikes as competitors gain") more control over their money and their spending, while also improving customer satisfaction. The proof is in the pudding. Our [survey of 2,500 shoppers revealed](https://www.financedigest.com/recent-survey-of-cfos-reveals-what-finance-teams-should-be-prioritising-in-2021.html "Recent survey of CFOs reveals what finance teams should be prioritising in 2021") that two-thirds (63%) are more likely to spend more money with the same retailer if they receive a quick refund. Building a more straightforward, transparent and customer-centric returns and refunds policy can not only help consumers to [manage their finances](https://www.financedigest.com/finance-management-for-small-business.html "Finance management for small business"), it can also enhance customer acquisition and retention. A [positive refund experience](https://www.financedigest.com/allianz-benelux-taps-into-modern-data-management-to-combat-fraud-and-foster-a-positive-customer-experience.html "Allianz Benelux Taps into Modern Data Management to Combat Fraud and Foster a Positive Customer Experience") is good for shoppers. And it’s good for brands, too. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---