As the holiday shopping season approaches, expect an influx of online purchases. With product discounts offered here and there, online shoppers wouldn’t want to miss such a bargain. But with the increasing number of customer orders, you also have to be wary of an equally important step in increasing profits: preventing unnecessary customer returns.
What is an eCommerce Return?
These refer to products that are purchased by online shoppers but are returned to the seller for various reasons. The return process usually involves a list of guidelines that the buyer has to follow for the return to be considered.
An ecommerce store usually has a return process in place in case a customer decides to proceed with the return.
Aside from the product having the tags and original packaging, part of the guidelines also discusses who will handle the return shipping fee: the buyer or the seller. The guideline lays out everything so the shipping process is seamless on the customer’s side.
Possible Reasons for Product Returns
Product returns happen when customer expectations aren’t met. It’s crucial to dissect the reasons for said product returns to prevent profit loss and avoid inconvenience on your part and the customer’s.
But did you also know that there’s a way to reduce product returns?
Preventable returns cost the global retail economy $642.6 billion each year, according to an IHL report, “Retailers and the Ghost Economy: $1.75 Trillion Reasons to be Afraid.”
Here’s a closer look at the primary causes of these returns and what you can do to prevent them.
Reason 1. Defective/poor-quality merchandise: accounts for $162 billion in returns worldwide: Quality control is key to preventing this type of return. Regularly inspect merchandise that comes in from your suppliers to identify problems. Also, have your pickers/packers perform an inspection before packaging materials for shipment. Setting an efficient quality control process reduces the number of defective merchandises that is shipped to the customer.
Reason 2. Online product descriptions not matching the actual product: account for $6.1 billion in returns: Make sure product descriptions are thorough and accurate. Include common information that online shoppers may want, such as size and weight of product, fabric or materials, product use and care. Work to ensure that product photos are as accurate as possible and provide multiple angles, lighting, and situations of a product to help online shoppers ensure they’re getting what they expect.
Use only high-quality photos so that customers can see product details and features more clearly. Photos of a product being worn or in use can help.
Furthermore, the use of product videos is also encouraged because it shows what your product is like in motion, and it helps encourage customers to buy your product instead of your competitor’s.
Reason 3. Products not delivered on time/when promised: account for nearly 7 percent of returns: Be very clear about expected delivery dates and provide a range of options for speeding delivery. This is especially important now that the holidays are coming closer.
Notify customers when you’ve shipped the products, and provide tracking information so they can keep an eye on their shipments. If unexpected delays occur, notify them promptly and provide new delivery estimates. They may prefer to cancel the order rather than receive it late. While you’ll still lose the sale, at least you’ll avoid the additional time and cost of processing customer returns.
If you want this responsibility off your shoulders, you can partner with a third-party logistics company instead to streamline your product shipments.
Reason 4. Customer finds a better price elsewhere: accounts for $83.4 billion of returns
This can be a tough problem for small ecommerce stores to deal with. Major companies, including Nordstrom, have begun price-matching if the customer can show that a lower price is available elsewhere. Make sure this is cost-effective for you before offering. You’ll also want to set stringent rules—for example, Nordstrom will only price-match on the exact same products (i.e., same size and color).
Reason 6. Buying the wrong size: accounts for $19.6 billion in returns to North America alone
If you sell shoes or apparel, be sure to include a sizing chart for the different brands you sell. Accurate product descriptions help too. Customer reviews that include whether the product runs small, large, or true to size are also useful to customers assessing what size to order.
Reason 7. Return fraud (items not actually purchased at the site are returned there): accounts for $28.2 billion in returns worldwide
This is likely not as big a problem for small retailers. However, setting stringent policies for returns (such as requiring items in original packaging or with tags attached) can help prevent return fraud. Just be sure you make these policies clear to customers before they buy.
Not only should you make these policies clear, but you should make the entire returns process as easy as possible. You can do this by providing updates to the customer regarding the status of their returned package through email. You can also set expectations as to when they can receive a refund or store credit. In this way, your customers will still have a positive view of your company regardless of the return.
Additional Remedies to Reducing Returns
Provide customer support
Outstanding customer service is measured in the swiftness of your responses when the customer needs help. The common mediums of communication are phone, email, and live chat. Through these, your customers can raise concerns about the product (e.g., instructions on how to assemble it, how to use it, etc.) instead of returning it because they thought of it as defective. Timely and accurate responses contribute to an all-in-all positive customer experience.
If you want to eliminate confusion when the customer receives their package, you can send post-purchase emails. A post-purchase email is an automated email that is sent to the customer after they’ve purchased a product. This email contains a thank you message to the customer as well as important information about the purchased product. Sometimes, it also contains promotional content that encourages customers to purchase a complementary product. Lastly, post-purchase emails help elevate customer experience and foster customer loyalty.
Motivate customers to leave reviews
Customer feedback helps future customers to make informed decisions about whether to buy the product or not. They can recount their experience or honest feedback about the product such as the quality, quantity, texture, durability, color, and more. To motivate your customers to leave reviews, provide incentives such as a discount on their next purchase or additional credit in their e-wallets.
Additionally, customer feedback is where you can identify which areas need to be improved. This helps ensure customer satisfaction for future purchases.
Invest in high-quality packaging
Products get damaged en route to the customers especially if it’s wrapped with frail packaging. Fragile products should have indicators on the packaging so that handlers will handle them with extra care. The usage of multiple rolls of bubble wrap, padding, and cardboard are among the steps that you can adopt for all your packages.
Penalize serial returners
Sometimes, customers order several products, choose one to keep, and then return the rest. Another is when a customer rents (purchases one product and then after multiple uses, decides to return it). This can be a hassle on your part, especially if it’s a regular occurrence from the same customer. Hence, you should penalize this kind of customer behavior to minimize returns.
Keep track of serial returners by creating a sheet to see how often they return a product. Once they reach a particular number of returns, you may send them a warning through email or block them from making future purchases from your online store.
Get the first order right
Unhappy customers are also a result of having received the wrong product. Imagine the anticipation and excitement of receiving a product from an online store only to find out that it’s the wrong item. It can be offputting to your customers. It sends a message that you don’t give value to your customers.
To get the first order right, you can print a list of their orders and tick them off as you go. Next, double-check all orders before wrapping them and preparing them for shipment. Take note of the correct size, color, quantity, etc. You can also send a picture confirmation of the products to the customer before shipping them.
Processing returns can be time-consuming and can take up a lot of your resources. This affects your business’ efficiency by disrupting your usual business operations. Instead of allocating your time to processing new orders, a huge chunk of it will go to handling the returns instead. With this situation at hand, your ecommerce business’ reputation will also be affected.
Reduce Returns on Your Ecommerce Business
While you can’t completely eliminate returns, the goal is to reduce them. To reduce returns is to be very transparent with the products that you sell, to ensure that products are at par with the customer’s expectations, and to provide the best customer experience that you can. While this is not an overnight solution, you can start by adopting the best solutions we mentioned above.
Like brick-and-mortar stores, ecommerce businesses are not safe when it comes to product returns. Hence, it’s important to reduce this as much as possible.
Over time, once these measures are in place, you’ll create a solid customer base and get a customer lifetime value in return.
