Ecommerce returns are on the rise and with the holidays approaching, the number of returns will swell even more. If you’re a small retailer, you know how quickly too many ecommerce returns can eat into your profit margins. Try these tips to reduce the number of returns from online shoppers in a way that benefits both your bank account and your brand image.
The State of Ecommerce Returns
Last year, U.S. ecommerce return delivery costs were estimated at $381 billion, Statista reports; this figure is predicted to reach $550 billion by 2020. Easy online returns are partly responsible for the rapid growth of ecommerce. Just as they now expect free shipping of their ecommerce purchases, consumers increasingly expect an easy return process, too.
Making returns easy benefits your business as well as your customers. A whopping 96% of consumers in a survey by Narvar say an easy return process makes them more likely to shop with that retailer again. And returns don’t always mean lost sales: 57% of shoppers in the survey end up exchanging or replacing the online purchases they return.
However, making online returns difficult or expensive can hurt your customer loyalty. More than two-thirds of shoppers say they’ve been deterred from purchasing something online by having to pay for return shipping (69%) or restocking fees (67%).
7 Ways to Reduce Ecommerce Returns
You need to allow returns, but how can you keep them in check? Here are 7 tactics to try.
1. Limit Free Return Shipping
Offer free return shipping only for purchases over a certain amount, such as $50 or $75 (you may already be doing this with free shipping for purchases). Maybe Amazon can afford to eat an $8 return shipping cost on a $7 product, but you can’t. Another option: Charge return shipping fees for customers who want refunds but provide free return shipping for exchanges or store credit.
2. Promote Exchanges Instead of Returns
Design your ecommerce website and copy to guide customers in the direction of making exchanges. Automated return service Returnly lets you give eligible customers credit to buy again even before they return their original items. When customers don’t have to wait to get their money back, you’re less likely to lose the sale.
3. Institute a Liberal Return Policy
One study reports that a lenient return policy can positively affect both your returns and your sales. When people in the study had more time to return a purchase (such as 60 days rather than 14 days), they were less likely to actually do so. More lenient return policies also led customers to spend more money with a retailer overall.
4. Encourage Customers to Return Products to your Physical Store
This won’t necessarily reduce the volume of ecommerce returns, but it will help reduce their costs. Customers who come into your store are more likely to make another purchase while returning a product. Handling returns in-store is much cheaper for your business than covering return shipping costs.
What’s more, lots of customers prefer in-store returns because they save on return shipping and get their refund immediately without worrying about the return getting lost in the mail. In the Narvar survey, 40% of shoppers say it’s easier to return to a store; 17% said they wouldn’t make a purchase from a site without the option to return to a store. You don’t even need a store to offer this option; Happy Returns lets you offer returns in person to a Happy Returns location (as well as by mail or to your store).
5. Tighten Up your Quality Control Processes3>
Broken, damaged or incorrect orders are a prime reason for customer returns. Not only do these mistakes cost you money, they also hurt your brand image. Review your inventory management software and assess your warehousing, fulfilment and shipping processes. Make sure products are being picked accurately, packed carefully and shipped appropriately.
6 Improve your Product Descriptions
Apparel is the online purchase most likely to be returned, according to eMarketer. It can be hard to judge the colors of the fabric or predict fit from an online description. This is one reason “bracketing,” or buying multiple items knowing that you’ll return some of them, is becoming more common. To reduce bracketing-related returns, Narvar recommends analyzing data about the reasons for returns and using these insights to improve pre-purchase fit and color recommendations.
Using size charts specific to the manufacturer, including close-up color swatches, providing photos from multiple angles and using video of the item on a model can all help consumers make better choices about online apparel. For non-apparel items such as home furnishings or sporting goods, providing details such as measurements, materials, weight and other manufacturers’ specifications helps customers get a better sense of what to expect from the product.
7. Shut Down Serial Returners
This is a drastic move, but if you have customers who return most of what they buy, you may want to consider banning them from returns. You can analyze your customer and inventory data to identify these customers and restrict their ability to return items. Return automation service Return Magic lets you customize your return policy for each purchase based on specific factors, such as type of product, whether it was on sale or not, and the reason for the return.
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