eCommerce returns

Keeping eCommerce Customers Happy with a Return Policy

Simon Eskow Uncategorized Leave a Comment

How you handle returns of sales through online channels may be the difference between keeping and losing a long-term customer.

The National Retail Federation reported in 2015 that just under 9% of purchases made in brick-and-mortar stores end up as returns. That rate shoots up to about 30% for online purchases, according to other estimates.

Returns cost eCommerce companies hundreds of billions of dollars a year globally, for the cost of shipping, refurbishing and recycling items for sale (often at a significant markdown).

The problem is so significant that a startup, Returnly, launched to give its clients’ customers instant refunds on returned items that can be used to buy an alternate product from the same brand. The service is designed to increase the chances a customer will buy, despite a disappointing product, by eliminating the weeks-long lag between a return and a refund.

Avoid the Return

The trick, of course, is to get the order right the first time.

Surveys show that more than two-thirds of returns are because the supplier did something wrong on their end. They sent the wrong item or an item that appears to be different from what the customer thought they were getting. Only one-in-five returns are due to a damaged item.

Return Options and Leniency

You may not experience a 30% return of sold items. It is guaranteed, however, that you will have to take some percentage back.

Customers expect return policies to be accommodating and easy to understand. If they see a policy that doesn’t give them leniency and options, they are prone to shop with a competitor.

Thus, companies that offer clearly stated, lenient returns policies with multiple options tend to win back customers than companies that don’t.

Lenient policies may include generous return timeframes beyond the 30-day standard, a cash refund option to store credit, and free delivery for returns.

Return Policy Worth the Expense?

The biggest enticement, and most expensive for the supplier, is a free shipping policy. It helps if you provide options for returns via the post service, a courier or in-store returns for companies with online and physical stores.

Retail industry analysts make the obvious remark that offering free returns eats up dollars. But the cost can be offset by reconfiguring fulfillment strategies (ie, as Urban Outfitters has begun to do) with better implementation of technology for tracking inventory in a reverse supply chain.

The reward can be significant. One study that examined 500,000 transactions from large retailers demonstrated that those with a free return shipping option saw a 25% increase in revenue.

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