The process of returns can be cumbersome for e-commerce businesses and their customers. Unlike merely walking into a shop and facing a store representative face-to-face, customers have to repackage and return items by post. E-commerce businesses have to deal with those returns. But if you don’t have a generous return policy, your business may miss out on many sales, and therefore profit. So returns are a way of life. Let’s look at five best practices to make it less burdensome for you and your customers.
This may seem counter-intuitive, but a generous returns policy can boost sales and reduce returns. Customers are much more likely to purchase from you if they know they can return the item, should they change their mind, or the product isn’t as expected.
When return policies are strict and have a brief window of time, it creates a sense of urgency with the customer. If they are experiencing any doubt about the product at all, they feel pressure to hurry up and return it. But a more generous policy that allows returns up to say, 90 days relieves the urgency and gives the customer a chance to grow attached to the item. This is called the endowment effect. They are less likely to return it now unless it is completely defective, dangerous, or sub-standard.
Also, a longer time frame can allow customers to forget. Without the urgency of a short time frame, customers relax into their new purchase, form an attachment, and forget to initiate the return.
Having a generous returns policy isn’t a manipulation tool. It’s fair. It gives them time to see if the item is all it should be. If it isn’t, they should have time to return it.
Your returns policy should be written in straightforward, easy to understand language. If customers feel challenged to understand your policy, they will be reluctant to buy from you. No one wants to throw their money down a hole. So forget legalese or business terminology that may not translate to everyone.
Your policy should also be easy to find on your site. Your customer shouldn’t have to go on a deep-sea dive to find this information. Provide a link to your returns policy on every product page. Your customers will appreciate that the needed information is always right there for them, and it could sway their decision to buy from you.
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Of course, there are always costs attached to handling and processing returns, but offering free returns to your customers is beneficial to both of you. Any prospective buyer will be more likely to purchase an item if they know they can return it free of charge in the event they aren’t pleased with it.
According to research, 54% of customers said they are more likely to buy online if there is a free returns policy - other research has the percentages even higher. The profit from offering free returns is far greater than the losses.
The best practice for handling returns has to be, making the process as simple as possible for your customers. Don’t make your customers jump through hoops to get the item back to you.
Consider including a pre-printed packing slip and label with every order. Not only will this make it easier for the customer to return the item, but it will also benefit your company. The labels and slips will have all the extra information to make the return easier to process on your end.
There are times when a customer loves the item, but it doesn’t fit, or it’s the wrong color. In those cases, make exchanges an easy process. If it’s easier to return an item, but exchanges are non-existent, you’re pushing your customer (and potential return buyer) in the wrong direction.
If your business is both online and brick and mortar, consider allowing returns or exchanges to be made in-store as well as by post. Your customers will appreciate the convenience, and you will enjoy their loyalty.
Shopping online can feel like an impersonal process (because it is), but when your customer has to make a return, use the opportunity to gain valuable feedback from them. Find out why they’re returning the item. This can be a simple process of a box to check on the return slip, with the option of a better explanation.
The information provided can help you to avoid returns in the future. If you begin to see a pattern emerging with the returns, you can take action to improve your product or fix other issues. For example, if people keep returning garments because they don’t fit, you may need to add a note to the product description, saying that it “runs a little large” (or small). Or you may need to rewrite product descriptions to include more information if they are being returned because they’re consistently not meeting customer expectations.
Feedback is always valuable to your business and your customers.
Bonus Tip: Figuring out reverse logistics
Returns are a way of life for retailers, but figuring out reverse logistics isn’t as easy as you think. Reverse logistics is just the process of moving discarded items back up the supply chain to regain value or for disposal.
Research finds that 52% of distribution center managers don’t have the resources or ability to determine whether returned items should be sent to the vendor, moved into inventory, or discarded. That same study found that 44% of managers said returned items were a “pain point” in their work.
To avoid your valuable inventory going to waste, consider establishing a standard procedure for handling returns. After you make the return policy clear to your would-be buyers, the next step is to explore the various apps and tools that make returns easier. Don’t try to reinvent the wheel. Check each app/tool provider’s current client list to see if any are similar to your business.
Using best practices for handling returns can make the process easier and less painful for you and your customers. Companies that go the extra mile are appreciated and enjoy customer loyalty.
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- By Aaron Cope
- Nov 24, 2020
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