6 Ways to Boost Profits By Reducing Ecommerce Returns

As the holiday shopping season approaches, are you focusing on how to attract more ecommerce customers and boost your ecommerce sales? That’s great, but you may be overlooking an equally important step in increasing your profits: preventing unnecessary ecommerce 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.

  1. Defective/poor quality merchandise: accounts for $162 billion in returns worldwide. Quality control is key to preventing this type of ecommerce returns. Regularly inspect merchandise that comes in from your suppliers to catch problems. Also have your pickers/packers perform an inspection before packaging materials for shipment.
  2. Online description not matching the actual product: accounts for $6.1 billion in returns. Make sure descriptions are thorough and accurate. Include common information that customers may want such as size and weight of product, fabric or materials, use and care. Work to ensure that product color photos are as accurate as possible and provide multiple views of a product to help customers ensure they are getting what they expect. Photos of a product being worn or in use can help.
  3. Products not delivered on time/when promised: accounts 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 the closer we get to the holidays. Notify customers when products are shipped, and provide tracking information so they can keep an eye on their shipments. If unexpected delays occur, notify customers promptly. They may prefer to cancel the order rather than receive it late, and while you’ll still lose the sale, at least you will avoid the additional time and cost of processing ecommerce returns.
  4. Customer finds a better price elsewhere: accounts for $83.4 billion of returns. This can be a tough problem for small ecommerce companies 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).
  5. 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 size charts 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.
  6. 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.


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