What’s the deal with mattress returns these days? This has been a topic of conversation lately, amongst both industry insiders and non-industry journalists alike. As more and more mattress brands are offering at-home trials and risk-free returns, it may seem like sending back a new mattress should be simple—but both the logistics and impact of high return rates are much more complicated than you may expect. What are some of the unintended consequences of more returned mattresses? And what can retailers be doing to minimize these growing rates?
The mattress industry isn’t the only product category that has seen an uptick in returns lately. In general, the growth of ecommerce has coincided with a greater rate of returned products. Online purchases are more likely to be returned as well, says David Sobie, co-founder and CEO of Happy Returns, a company that offers technologies and logistics to help retailers manage their returns: “Shoppers return five to 10 percent of what they purchase in store but 15 to 40 percent of what they buy online.” According to the U.S. Postal Service, the number of returns in the US and Canada jumped by 66% between 2010 and 2015.
While we know this trend has impacted the mattress industry, it’s not quite as clear as to the extent. For better or for worse, Casper has been at the center of this discussion around returns. In some ways, the brand has become short-hand for the online DTC mattress category at large—but with that comes added scrutiny, as people try to get a clearer picture of how the segment is faring. Additionally, the company’s public offering opened up much of its financial information to the general public. This led Furniture Today’s bedding editor, David Perry, to do some digging of his own trying to pin down the exact number of Casper’s return rate. Pouring over the company’s prospectus, the only indication he could find was a line item for “returns, refunds and discounts” which totaled 20% of revenues in the first three quarters of 2019. He turned to other industry experts for their insights on Casper’s potential returns, with estimations ranging from the 8.7% to over 18% range.
The existence of returns in and of themselves are not always terrible for business. Previous research has shown that higher return rates do not necessarily correlate with sales losses, as many people who return a lot of their purchases also tend to buy more products. All of this becomes more complicated when it comes to mattresses, of course. While some consumers may return lower-cost items such as clothing or smaller housewares in order to quickly swap them for different sizes or styles—the process of returning a mattress is much trickier.
There is also the added question of: what do you do with a returned mattress? It’s not as easy as returning the bed to the store or warehouse and repackaging it—most returned mattresses are not able to be resold through traditional avenues. Instead, many DTC brands simply eat that cost and try to donate their returns instead. For example, Tuft & Needle has an in-house logistics team that connects mattress returns with a network of over 250 charities throughout the country. The brand simply directs the customer to one of these charities, who then handle the donation as they normally do.
In her FiveThirtyEight article, Koerth discovered another avenue that some ecommerce mattress brands are using to deal with returns. Sharetown is an independent agent that works with a number of DTC mattress brands such as Purple, Layla, Nest and Helix. Contracted by the mattress brand, the company works by connecting the unsatisfied customer with a “nearby agent who takes the mattress off their hands, cleans it up, and markets it for sale on local community sites like Facebook and Craigslist.” This set-up is designed to keep each party in the resell loop: when the returned mattress is eventually re-sold, Sharetown and the mattress brand share the profit. According to Cody Hunter, founder and CEO of Sharetown, his company’s process does not cannibalize sales from traditional mattress sellers—since the consumer demographic who buys used mattresses is not those who are looking to pay full price. These are the people who would, instead, opt for not buying a mattress at all.
But not all returned mattresses can be donated or resold—even when they’re good as new. Many consumers are wary of buying a used bed, and the rules around mattress donations vary widely. California and New York, in particular, pose issues because many of the local charities are unable (or unwilling) to accept used mattresses. In these instances, there are an increasing number of mattress recycling programs available. For California-based companies, the Mattress Recycling Council’s “Bye Bye Mattress” program can help with useable mattress returns. Introduced in 2016, this program has helped recycle five million mattresses—saving the state more than 6 million cubic yards of space in landfills.
Funded by a recycling fee, which is tacked onto the sale price when a mattress or box spring is sold, the program aims to combat illegal dumping and minimize landfill waste. The program is able to collect the returned mattresses through a network of permanent collection sites, public collection events, in addition to collaborations with solid waste providers, nonprofit organizations and small and minority-owned businesses. The mattresses are then transported to regional recyclers, where they are cut open and layers separated. The interior materials are then organized for reuse by type: so the foam can be remade into carpet padding, the springs used to make other steel products, etc. More than 80 percent of a mattress can typically be recycled: including steel, foam, cotton, wood and other materials.
Of course, these types of programs are not available everywhere yet. When there are no donation, resale or recycling options available, many companies have to resort to hiring a waste removal company. And that means the mattress, or at least a portion of it, may end up in a landfill—which further contributes to the existing climate crisis.
But the logistical and environmental concerns are just part of the issue. Cost is also a major drawback to higher return rates, especially in the age of risk-free, no-fee returns. When a consumer returns their new mattress, they are refunded the full cost. Even when the brand or retailer can resell the return, they will have to do so at a discounted price—while donating it brings in no money at all. The worst case scenario is when the bed gets thrown away, as many brands have to fully cover the cost of removal. All in all, these losses can hurt the company’s bottom line—and require them to either operate at a deficit or build those added costs into future price tags.
The final concern surrounding higher mattress returns? Word of mouth. Simply put, consumers talk. They tell their friends about their retail experiences and they write product reviews online. If enough people have expressed dissatisfaction with their purchase, that is going to reflect poorly on your product, brand or store.
So what can retailers do to minimize their return risks?
While there is a growing number of companies touting new solutions for alleviating the financial and logistical burden of higher returns, why not start at the source instead? Today’s consumers expect a generous and easy return policy. The best way to reduce return rates is definitely not to limit these policies - but to minimize the likelihood that your customer will want to return their new purchase in the first place.
Promote The In-Person Rest-Test
Even though today’s consumers are more willing to do it, buying a mattress sight-unseen is still a risky move. Mattresses are a very subjective product: what works for one person may not for another. Testing a mattress in person, with the guidance of a well-trained retail sales associated, remains the best way to make sure that the customer is walking away with the best possible mattress for their needs. Focus your consumer messaging the true value of this step—emphasizing that spending the time to rest-test now can save you the hassle of having to return your mattress later.
Utilize A Diagnostic System
If you really want to step up your selling strategy, a diagnostic system can be a huge asset on the retail floor. It adds another level of science and objectivity to the decision-making process, helping the consumer feel more confident that they’re picking the right model for their unique bodies and needs.
Add Accessories To Your Merchandising Mix
There are a number of different factors that can contribute to poor sleep. By offering a wide selection of quality accessories—from sheets and pillows to adjustable bases and black-out curtains—you can help consumers take a more comprehensive approach to improving their sleep environment.
Offer Customizable Mattress Options
The future of sleep is personalized! Mattresses like the ReST Bed or Kingsdown’s BedMatch adjust with the sleeper to ensure that they’re always getting the right level of comfort and support, minimizing the potential for comfort returns. For a more analog option, products like Bedgear’s M3 mattress and Spaldin’s new Circular Collection allow customers to swap out certain individual elements of their mattress. This not only makes it easy to rectify an unsatisfactory purchase without a return, it also limits how much of the bed may need to be recycled.
This story originally appeared in eNews. Click here to get Sleep Retailer eNews delivered straight to your inbox.