New data from Paymentsense reveals that small home furnishings businesses paid more refunds to customers than eany other type of business in 2020, paying an average of £12,000 in refunds across the year (£787 per month).
It has been reported that before the pandemic, shoppers were returning a huge £7b in purchases every year.
On top of this, cash use declined by -60%, and Buy Now Pay Later (BNPL) adoption grew by +39% since the start of the year, and is set to double by 2023, says Paymentsense.
Small businesses are at most at risk of fraudulent refunds, being hit with £1000 per month, says the fintech company, which analysed its own data from over 80,000 businesses in the UK to discover which industries and cities across the UK refunded the most transactions.
Jon Knott, head of customer insights at Paymentsense, says: “With the pandemic still restricting access to high street stores, consumers have turned to online shopping. With this increase, naturally, we’ve seen more refunds.
"Many ecommerce retailers have made their returns process easier– through couriers, drop-off points and signing up to Buy Now, Pay Later schemes. So shoppers could be buying more, knowing that they can send items back at the click of a button.
"However, refunding isn’t without its pitfalls. Shoppers need to be aware that refunds aren’t processed and deposited straight away. It’s always worth giving a company’s refund policy a read before purchasing, to avoid overspending before payday, or being left with unwanted vouchers.”