Returns are unfortunately inescapable in e-commerce. However, they become a significant concern during the holiday season, with e-commerce businesses reporting a 70% increase in returns between Christmas and New Year’s.
Although e-commerce returns cost millions to e-commerce companies, buyers favor retailers that provide liberal return policies and peace of mind if they receive goods that do not quite meet their expectations.
So, if you are wondering what the most effective ways to manage e-commerce returns are, you have come to the right place.
In this article, we discuss the current trends in returns management and five e-commerce returns best practices which are
- Upgrade Product Pictures
- Enable Customer Reviews
- Offer Flexible Return Types
- Leverage Third-Party Return Services Provider
- Think About Your Brand Image
Ready to dig in?
The Current State of Play
Customer returns were relatively minor in the past. But, with 214.7 million Americans shopping online and transportation costs rising, returns of unwanted items are damaging the retailer’s profits.
How Customer Returns Affect E-retailers
Online retailers face a 20% return rate compared to brick-and-mortar stores which process 9% of returns. On top of that, specific sectors and categories have exceptionally high return rates. Women’s clothing, for example, has a 23% return rate, while footwear stands at 20%.
Businesses bear enormous costs as a result of such high average return rates. According to the Wall Street Journal, customer returns can cost merchants anywhere between $10 to $20 depending on the item (excluding freight cost).
Aside from that, unwanted items often cannot be resold at full price, resulting in a loss of revenue. Many retailers also admit that processing returns of low-priced products frequently makes no financial sense because the cost of return ends up being greater than the product’s value.
Yet, retailers have little choice, as customers’ habits are unlikely to change.
Customers Expect Generous Return Policies
Looking from the shoppers’ perspective, a lenient returns process is key to a positive customer experience. 67% of shoppers check the returns page before completing a purchase since they want to be sure they have the flexibility to send back items that do not fit or are unwanted.
Moreover, 62% of buyers expect at least 30 days return window. Admittedly, they also want a free, efficient, and convenient return of unwanted purchases, which forces online retailers to come up with the best return solutions to meet buyers’ needs. After all, shoppers grow loyal to companies that provide a consistently excellent shopping experience. Therefore, taking your returns seriously is critical to your business’s success.
Five E-commerce Returns Best Practices
Now that we have looked at retailers’ challenges in handling returns and customer expectations, let’s delve into some practical e-commerce returns strategies that you can apply in your business.
Upgrade Product Pictures and Description
When shopping online, customers rely on the visual and written information you provide on your e-commerce site. As a result, if there are any inconsistencies in the product description or your images are of low quality, buyers will return the items without hesitation.
Indeed, the most common cause for product returns is dissatisfaction with the product’s appearance when received. The good news is that you can solve this issue by including a detailed product description and high-resolution photos.
Bonus tip: If you sell clothing, have a sizing guide or chart, as standard sizing varies from manufacturer to manufacturer.
Enable Customer Reviews
Several studies suggest that unbiased customer ratings and reviews help make better purchasing decisions. In fact, reviews can help reveal product information that is otherwise unavailable on the website. This, in turn, allows shoppers to reduce uncertainty and uncover product flaws, which can also help you tackle the problem of returns.
Furthermore, enabling honest feedback aids in long-term quality control. If a particular item receives numerous poor reviews, you may stop selling it to reduce the likelihood of returns and protect your reputation.
Offer Flexible Return Types
Customers perceive returns as friction in their shopping experience. A clever way to overcome it is by offering flexible and lenient return windows and types that benefit your business.
For instance, offer to exchange an item for another product and credit any difference to the original payment method or consider sending the money back in a store gift card. Using these flexible return policies allows you to protect the profits and keep at least part of the money in-house.
Leverage Third-Party Return Services Provider
Managing reverse logistics at your premises can quickly become messy while costing you additional money. Your customers expect a seamless return process, but do you have the right tools and operational capacity to deliver just that? If not, you should consider partnering with a third-party return services provider!
Companies, such as Phase V, specialize in handling customer returns quickly, efficiently, and cost-effectively. Besides, outsourcing returns management will simplify your operations and boost customer loyalty.
Think About Your Brand Image
Finally, there is a strong correlation between a returns policy and your company’s reputation. Buyers perceive e-retailers with flexible return policies as more customer-friendly, meaning they are more likely to shop with them.
Data reveals that a simplified returns process drives loyalty, with nearly 90% of buyers willing to shop with a liberal retailer again. Thus, e-commerce businesses that create “obstacles” for buyers returning products are unlikely to receive repeat business, as confirmed by numerous studies. So, think about what costs you more: returning or exchanging an item or acquiring a customer.
The Bottom Line
With just a few tweaks in your approach to e-commerce return management, you can turn around the negative impact returns have on your revenue. Your customers expect nothing less than flexible and fast return processing; thus, ensure that you deliver just that!
Are you struggling to keep up with the processing of customer returns? Contact Phase V—a number one end-to-end order fulfillment company—to discuss your case today!