The Relationship between Product Returns and Business Performance in Selected Apparel Retail Shops in Cape Town, South Africa

Globally, retailers experience increased levels of challenges related to product returns. The causes of increased customer returns range from customer dissatisfaction, product fault to mere fraud. The aim of this paper is to explore the relationship between product returns and business performance in selected retail shops in Cape Town. This research took a deductive and subjective worldview which is more interpretive in nature to suit the exploratory study. A qualitative research approach using selected shops and Qualitative Data Analysis was employed. Purposive non-probability sampling was used to interview eleven shop managers in Cape Town. Raw data was transcribed, coded and themes were generated manually using MS Word. Four themes were generated and the findings showed that the relationship between returns and shop performance is largely ‘indirect’ than ‘direct’, ‘positive or negative’, ‘costly or beneficial’ and ‘insignificant or irrelevant’. The researcher recommends that retailers eliminate returns entirely and stick to manufacturers’ warranties and guarantees. In addition to this, retailers must issue in-store vouchers instead of cash refunds. Implement periodic returns policy review to curb policy abuse or policy manipulation by both staff and customers. This research focused on ‘apparel returns’ so there is need for further study in other product returns categories.