Posted 23.06.2022
Seeing your sales, revenue and profit stats increase month on month and year on year is incredibly satisfying. Not only due to the positive impact it has on the growth and development of your ecommerce business but also knowing that you’re providing something that your customers want and need.
However, one of the warning signs that disprove that you’re delivering precisely what your customer base wants and needs is if your product returns stats are also rising.
There are multiple ways you can turn the tide of rising customer returns, one of which being a detailed and easy-to-find user-friendly returns process.
A returns process or policy is a clear step by step guide on how a customer can send their items back and claim a refund if the product doesn’t suit their needs.
Every ecommerce website needs to have a clear policy for customer returns. Your ecommerce returns process should include information such as:
A clear and fair returns policy on your ecommerce website can increase the chances of online purchases being made, especially as they cannot physically see or touch the item before purchasing as they could in brick and mortar stores.
This assures your customers that you are a fair retailer. According to a survey, 70% of respondents stated that they look at a store’s returns process as part of their decision-making process.
A detailed returns policy also provides valuable insight into how your company operates. 20% of those surveyed said that if a brand didn’t provide their preferred method of returning items, they wouldn’t make a purchase.
Additionally, those who have gone through the returns process and have a positive customer experience are more likely to be future shoppers at your online store too. Repeat customers cost less to market to and so, the more repeat custom you can generate, the better for your bottom line.
While having a policy in place to process returns and giving customers clear guidance on this procedure is important to maintain customer loyalty and encourage future spending with your brand, too many returns can have an adverse effect on company profit margins, especially if you aren’t charging your customers for returns.
Essentially, you could be paying for shipping, potentially incurring transaction fees while issuing refunds and being charged return shipping costs. The more returns you have to process, the more profit you could be losing.
The same survey we mentioned early gave three reasons why customers mostly return their items:
Here are just three ways returns and refunds could affect your business:
A paper from Thomas S. Robertson, a marketing professor at Wharton, specified that, in 2018, 10% of retail sales were sent back. Those returns account for about $369 billion in returns. In the UK, product returns cost businesses around £60 billion each year.
Unfortunately, on average, consumers expect a brand’s return process to provide that service for free. 59% have said that if they have to pay a fee to return any items they purchased, they will stop the purchase process and go to a competitor that does offer free returns.
Another costly problem with returns is whether the product is in a sellable condition; customers are less willing to wrap their return items in bubble wrap to ensure it makes it back to you safely.
If the items comes back to you damaged, then the company can’t resell the item and can’t recoup the costs of the return.
Many ecommerce businesses will make use of real-time inventory management and will reorder stock when levels start to get low. These products are stored in warehouses, ready to be delivered on order.
The problem is that warehouses can only hold so much stock, and when unexpected returns come back, they have to go somewhere. Overcrowded warehouse spaces can be dangerous and make it more difficult to organise.
Reducing returns will result in increasing warehouse space, making more room for new product lines.
The time allocated to managing returns could be put into marketing a new product line, packing and sending new returns, adding detail to online product pages and more.
The great news is that there are things you can do if you run an ecommerce site to reduce returns and see those sales and revenue statistics continue to increase. Here are four strategies that will result in fewer returns being made:
When optimising your product descriptions, think about more than just adding the colour and material, for example, to reduce returns.
One example of this could be if your B2B brand sells:
Is there a place on your product page for a sizing chart and a true-to-fit chart? Making use of fitting tools as part of your wardrobe management system will encourage users to check which size will best meet their needs, reducing returns and increasing the customer experience.
Another way to optimise your product pages to reduce the number of returns is to collate commonly asked questions and add these in the form of a Q&A section.
Not only will this lower the risk of returns, but it may speed up the decision-making process and increase sales.
Before publishing a new product page, make sure that the descriptions include all of the relevant information and information for customers returning items.
It’s a well-known fact that customers trust reviews from other customers more than those associated with the brand selling the products. Not only is it really important to include reviews and other user-generated content on your product pages, but ensure that the reviews you’re using are relevant to the product being sold.
Some automated tools may pull in reviews, but they won’t necessarily be talking about the product your customer is looking at. By keeping customers informed by ensuring that all reviews are relevant, you’ll be helping online shoppers reach an informed decision that will impact the chances of them returning the item or items they’ve purchased from you.
This piece of advice is more for those operating within the apparel industry, but businesses operating in other sectors may find it useful.
One outfit will look entirely different on ten different people. This is likely the reason why 33% of online shoppers stated that the product ‘looked different’ in person.
Rather than use a lot of marketing budget hiring as many models as possible, asking your customers to submit pictures of them wearing the items is a great way to show the different ways the outfit can look for a relatively low cost.
Because these are user-generated, you don’t need real high-quality photos to get the message across.
Some shoppers will be happy to do this for free, whereas other shoppers may be looking for a small incentive, such as a certain percentage off their next purchase or store credit.
Some potential customers will choose ecommerce over visiting a brick and mortar store because they are low on time and need to buy something for a specific occasion.
By not specifying when delivery can be expected, your shoppers may have to make an order and hope it gets delivered on time. If it isn’t, you won’t just have to deal with an unhappy customer, but also unnecessary returns.
Sometimes return shipping is needed. So, while actively trying to lower your return costs by optimising your customer experiences and setting realistic expectations, it’s also worth looking into how you can use returned merchandise to increase conversion rates. Here are three things you can try:
Instead of simply providing a return slip that can be printed off, online retailers have the chance to encourage customers to make an exchange rather than a return. This way, if your customer was planning on trying another item out, they won’t have to return to the site, and then navigate the eCommerce store to make another purchase.
Time can be saved by the brand too. Using AI, they can identify trends and make recommendations that the customer is more likely to like.
Most customers will want the money back for return items as quickly as possible. To increase the chances of these shoppers being future customers, make the time for refund as short as possible.
Additionally, allowing customers multiple ways to send the wrong item, or just an item that they no longer need, is a great way of improving their experience shopping with your eCommerce store.
Knowing that product returns are simple and straightforward, with the refund taking place as quickly as possible increases the likelihood of customers shopping online with you again.
If you notice that the same product is being returned time and time again, perhaps it’s time to look at the product itself. Is the purchase price too high? Is the quality less than other products you sell?
If you give your consumers the opportunity to state why they are returning their online purchase, it’s easier to establish the underlying reason and respond.
You can then decide whether it’s worth trying to improve the product or pull it from your line altogether.
Seeing your product orders continually rise is an amazing feeling, but that feeling is dampened when your return rate is high. By including as much information about the product in question, adding customer reviews, and looking into returns feedback from your target audience, you can reduce the costs associated with product returns and even transform returns into additional business.
Evolve Trader provides B2B businesses with flexible software to improve user-experience for both employees and customers. Our customer order portal can significantly improve user experience and is incredibly flexible.
