Buy now, return later: how AI is driving sales – and regret

AI-powered shopping soared in 2024, but returns are breaking records too.

AI chatbots have helped make shopping easier over the 2024 festive season, boosting online sales by 4% compared to last year, according to a report by Salesforce.

While this may have significantly increased the number of orders, a 28% rise in returns is an unpromising sign for retailers, indicating a clear tendency toward impulse buying – and profit margins may suffer as a result.

AI’s frequent nudges for consumers, including personalized recommendations, dynamic pricing, and “buy now, decide later” options, are highly persuasive. While they lubricate the supply chain, they may also create chaos in the returns process.

The overall use of chatbots rose 42% from 2023, demonstrating consumers’ eagerness to turn to automated solutions.

Customers are persuaded by tactics such as scarcity bias – "Only 2 left in stock!" – or social proof – "10 people are looking at this right now" – to create a sense of urgency and convenience that helps push conversions.

Physical returns to stores used to come with a sense of friction, but now the option to simply send your unwanted item back by post involves less hassle than reasoning with a human or searching for your crumpled receipt.

Frictionless buying, frictionless regret

While the high number of returns can be seen as a drawback for retailers, better predictive tools might be able to gauge the likelihood of returns in the future.

The penchant for AI chatbots was also reflected on the high street, with brick-and-mortar shops visibly suffering during the post-Christmas sales period.

Compared to the human touch, chatbots cut through inefficiencies and handle FAQs, process returns, track orders, and make recommendations.

A successful implementation of this is natural language processing (NLP), which mimics human conversation to provide a degree of empathy and understanding without the friction of a human standoff.

This scalable assistance is a convenient and dynamic infrastructure reshaping the way we shop. By combining chatbots with human agents – who are used to handle escalated, complex issues – retailers balance efficiency with personal service.

And while AI, in effect, “learns on the job,” the future should bring bots that proactively solve issues before they arise, such as automatic refunds for late deliveries.