How successful eCommerce businesses cope with (and reduce) returns
As much as returns are an inevitable by-product of eCommerce, they are also a source of tension and confusion for many online retailers. Just as poor execution during the initial fulfilment of an order can damage your business, a badly handled returns process can have a sizeable impact on customer satisfaction, repeat business and brand reputation.
So, how do the best-in-class online retailers ensure their returns process is up to scratch even when the volume is mounting up?
Why are returns so important?
Since it’s the final (and least wanted) stage in a customer’s purchase, returns tend not to get the attention they really need. Yet a huge 77% of internet users in the UK alone made an online purchase last year, and with consumers unable to ‘try before they buy’ when shopping on the web there are bound to be situations when the item isn’t quite what they want.
While a customer is well within their rights to return goods, the process can be extremely costly to retailers. Returns resulting from online transactions alone are estimated to cost the UK £20bn a year. The expenses involved in a return can include:
- The cost of offering a ‘postage paid’ returns label
- The cost of actually handling and processing the returned item(s), either back into stock or to be disposed of
- The impact of issuing a refund on profits
- The potential cost of lost repeat business or a damaged reputation should the customer be unhappy
The increasing popularity across the world of deep discounting events such as Black Friday, Cyber Weekend and Singles Day has also contributed to high volumes of returns. Encouraging consumers to make impulse purchases online leads to a high percentage being sent back - after Black Friday 2015 the UK public returned so many goods that it cost an astonishing £180m to handle and process them. And that’s not even considering Christmas and January sales!
Reverse logistics can be a costly side effect of eCommerce (especially in industries such as fashion), but there are a number of ways to reduce the frequency of returns and handle them more efficiently. Our expert tips will ensure even customers who send goods back want to revisit your site in the future.
Preventing returns (and executing them well when they do happen)
Present your returns policy clearly
Virtually all retailers have their own returns policy, but failure to communicate yours clearly before a transaction is made could discourage shoppers from making the purchase, to begin with or cause confusion and disappointment at a later date.
We probably don’t need to tell you this, but your returns policy should cover returns, exchanges and repairs where appropriate for the time frames specified in the Consumer Rights Act.
Gift retailer Luckies of London (one of our very own clients) is a great example of a clearly communicated returns policy, with a link included in every product listing. Their transparency provides reassurance to customers and fosters trust in the brand.
The customer is much more likely to make the right purchase for them if they have all the information they need. Provide as much detail as possible - from photos to video, measurements, features, and materials. Enabling ratings and reviews can also allow previous customers to add their own feedback on suitability - almost 70% of consumers say they are influenced by online reviews, so the potential payoff of displaying them is worth considering.
Catflap brand SureFlap (another successful James and James client) have an excellent tool that helps their customers ensure their pet’s microchip is compatible with the produce when they type in the number. This pro-actively reduces their returns at the point of purchase, saving the time and money that would be needed to tackle a return from someone who discovers incompatibility with the device after they receive it.
Get it right
Returns due to the end customer receiving the wrong item are far more common than is necessary and account for a large percentage of send-backs and exchanges. Not only does this cost you money in processing, but it could also disappoint customers and damage your reputation if it happens too often. eCommerce brands that choose James and James enjoy consistent 99.998% fulfilment accuracy as standard so that customers get exactly what they order.
Make the returns process easy. If for whatever reason your customer still decides to return an item, having a complicated, labour intensive process for doing so could leave a bad impression. A fast, easy return will encourage the customer to come back again. James and James handles returns on behalf of eCommerce brands, providing a clear, simple process for the end customer. Our top tips for getting this final stage right are:
- Be clear - provide instructions and the relevant labels on the packing slip, or allow the customer to generate their own slip online.
- Be transparent - if your fulfilment system allows it, provide the end customer with updates as to the status of their return. Knowing that their package has been received and a refund is processing can ease a lot of strain on your customer service teams. Don’t leave them waiting in the dark.
Collect the right data
The biggest key to reducing the number of returns in the first place is making sure you’re able to access detailed data on why they’re happening in the first place. Looking at what customers are returning and why could highlight design faults, quality issues and more that will reap dividends if detected and improved. The use of RMA (returns merchandise authorisation) whereby the customer generates their own return slip online, will allow you to collect this additional information. It’s preferable to simply working from a pre-printed returns form since the customer may not fill in enough details for you to make use of their feedback.
Interested in outsourcing your fulfilment and returns?
James and James offer an end-to-end fulfilment service that takes the pain and complexity out of delivering customer experiences that are memorable for all the right reasons. 99.998% accuracy as standard, a software system that’s easy to use and gives you full visibility of your operations and unique data insights. What’s not to like?
To find out how James and James can make your brand grow contact us today
← 6 simple strategies to create more repeat customers
- What is a SKU, why is it so important, and how many do you need?
- Why Facebook Marketplace just doesn’t work
- 6 Reasons why stock control is important for eCommerce success
- Importing in to the EU for International Sellers
- How many SKUs? Indicators for when you may have too many (or too few)
- What should luxury eCommerce brands look for in a fulfilment partner?