eCommerce returns often reach their annual peak following the Black Friday to Boxing Day sales. Here we offer five tips on how you can reduce them as a retailer – or at least turn them into a positive experience for your customers.
26% of all retailers – and 37% of fashion retailers – say that the number of returns they receive has risen over the last two years (2017-2019).
Some commentators blame customers for the trend. They note the rise of serial returners (who overbuy knowing they’ll return most of the items) and even snap-and-send-backers (who wear clothes once “for that hashtag moment” before returning them).
Others blame retailers, who offer free online returns, try-before-you-buy schemes or cyber discounts. These all incentivize purchasing, but inevitably lead to more returns. Customers order the same product in multiple sizes or overspend in the sales, only to face buyer’s remorse later.
The growing cost of eCommerce returns to retailers
This trend puts the cost of returns at a massive £7 billion annually in the UK, with £2.4 billion of that resulting from the Black Friday, Cyber Monday weekend. It’s easy to see why, when you add up the cost of:
- Offering a postage-paid returns label
- Receiving and processing the return
- Issuing a refund or shipping a replacement item
- Losing repeat business, if the customer is left unhappy
- Managing stock levels, when your inventory is in transit to and from customers
- Re-packaging, re-stocking, disposing of or even destroying returned items.
As such, it’s vital that every retailer reduces – or lessens the impact of – eCommerce returns. Here are five ways you can do just that.
1. Have a clear, accessible returns policy
Two-thirds of shoppers now review a retailer’s returns policy before making a purchase. As such, you need one on your site. This won’t necessarily reduce returns. But it will increase your eCommerce conversion rate and ensure customers don’t get a nasty surprise when they return an item later.
Your returns policy should be written in clear, understandable language, not legalese. It should be accessible from key points in the customer journey – for example, your footer menu, product pages, checkout process and order confirmation email.
As a minimum, your policy will need to comply with any regulations that govern returns, exchanges or repairs in the market(s) you operate in – for instance, the Consumer Rights Act in the UK.
If you decide to offer a more liberal policy than this, then you’ll need to specify whether returns are free, what time frame customers can return within, and what condition returned items must be in. And if you vary your policy throughout the year – offering a longer returns window over Christmas, for example – you’ll need to make that clear too.
2. Help customers buy the right product
Perhaps the best way to reduce eCommerce returns is to ensure customers buy the right product for them in the first place. To do this, you need to provide as much information as possible on your product pages.
This could be photos and videos, key features and benefits, or full technical specifications. In the world of fashion, over a third of consumers want retailers to improve – or even standardize – size guidelines, to help them choose the right item. And retailers are responding, by providing exact measurements for their garments.
Enabling ratings and reviews on your products can also help. These allow prospective customers to get immediate advice from existing customers on what product is the correct one for them.
3. Eliminate returns that shouldn’t happen
Nearly a quarter of eCommerce returns are due to incorrect items being shipped. A further 20% are due to products being damaged in transit.
In this day and age – with the order fulfillment software, packaging materials and eCommerce shipping solutions that we all have access to – these returns shouldn’t happen. They not only cost you time and money to rectify, these mistakes also pose the biggest risk to your customer satisfaction and loyalty.
Do you experience these types of returns on a regular basis? Then you should review the people, processes and technology you use within your fulfillment warehouse:
- Are your people trained on how to pick and pack items correctly?
- Do you have checks in place – for instance, barcode scanning – to ensure the right products go in the right parcels?
- Do you need to invest in warehouse management software to oversee your operations?
You could also outsource your order fulfillment to a specialist provider, which already has these safeguards in place. This can reduce error rates to as low as one in every 200,000 orders.
4. Collect data on the reasons for returns
Asking why customers are returning items is an important step in reducing them in the first place. If you find that customers are reporting design faults or quality issues, you can rectify these with your suppliers. If they’re reporting that a product is bigger than usual, you can update your product pages, to communicate the true sizing before purchase.
Many retailers opt to collect this information via paper slips in the parcel, with tick boxes for each reason for the return. But these can be time consuming to process and analyze, since the data must be translated into a digital format.
A better way is to use Return Merchandise Authorisation (RMA). This requires your customer to visit a webpage and enter the reason for their eCommerce return, before they can generate a postage label and packing slip for it. This not only takes the hassle out of collecting data. It also forewarns you that an item is on its way back, helping you manage your stock and cash flow more effectively.
5. Turn returns into a positive experience
Even if you take all of the steps above, you’re still going to receive some returns – after all, you can’t prevent customers changing their minds. Fortunately, 92% of shoppers say that they’ll buy from a business again if the returns process is easy.
To create this simple customer experience, there are a few things you can do. Following these steps will also help to reduce “Where’s my refund?” support tickets, along with the burden these can place on your customer service team.
- Give instructions: you should make it clear in your returns policy, order confirmation emails and packing slip how customers can return an item and the deadlines for doing so.
- Offer tracking: another benefit of the RMA approach above is that it enables customers to follow the status of their eCommerce return online. From the same webpage they started their return on, they can check when you’ve received and processed it.
- Process quickly: customers expect to receive a refund or exchange fast. To do this, make sure you have the people and processes in place to receive, inspect and process returns. This is particularly important at peak times, when eCommerce returns from cyber discounts can run well into January.
Another option is to outsource your returns management to an order fulfillment provider such as James and James. We’ll first help you eliminate returns that are due to incorrect or damaged items. We’ll then help you gather data on the reasons for returns, and process each one quickly, even at peak times.
Want to know more? Get in touch to discuss our returns management service in more detail.