Through The Grapevyne

Ep 2: Rumble in the retail jungle & the truth is about VRPs

Each month we weigh in on hot topics, buy-outs, new mandates, latest tech buzz and sometimes even news teetering on bizarre. We bring together voices from the industry to share insight and shed light on what’s happening in the world of fintech.

2 years ago • 2 min read

Ep 2: The one where there’s a rumble in the retail jungle and we ask what the truth is about VRPs?

Rumble in the retail jungle

Some are calling it ‘bold’, ‘surprising’, while others say it’s been a long time coming. Returns will no longer be free, with Zara announcing they’ll start charging £1.95 for third-party drop-offs. This amount will be deducted from the refund sum. Earlier this month, Boohoo reported that their pre-tax profits were down by 94% due to a surge in returns.

Is it a case of undoing all that’s been done to make it easier for customers to shop or will this have a knock on effect? Retailers need to remain profitable and become more sustainable amid consumer spending being held back as the cost of living increases. Could this save the day?

However, returns have not always been free. Next and Uniqlo charge, as well as eCommerce homestore Wayfair, charging between £4.99 and £9.99 for small parcel courier services returns and from £20 and £50 for large parcel courier services.

Dave Wiltshire, Founder @ Patchworks

“It’s yet another pain point bolted onto the customer journey. Retail has been struggling since Covid-19 hit, and while this has plus points in terms of sustainability especially, I think we’ll see numbers drop. Returns in-store are still free, so we could definitely see higher foot fall, but I’m not convinced this will boost sales. This could be an end to the ‘serial return’ culture, but if other retailers follow, a focus on the overall experience will now be even higher.”

Dave Sneddon, Director of Product @ Vyne

“If other major retailers follow suit, this could prove to be an interesting shift. Our research tells us that customers want and expect a smooth ecommerce experience. One potential way forward could be for retailers to offer free delivery to customers who pay via account-to-account, which will remove high-cost card fees from the transaction, while maintaining higher brand sentiment and customer loyalty."

The truth about VRPs

When will Variable Recurring Payments (VRPs) be ready to use? Will they kill off Direct Debits? Will the payments landscape be changed forever? There’s so much noise in the industry right now about VRPs, so we thought we'd shed some light on where things stand and what is actually possible, and share a potential timeline so you’ll be set when VRPs start making their mark.

Read the full blog post