E-commerce Product Return Rate – Statistics

Vanessa Tran , Feb 06 2021

Many businesses may not be aware of this, but the way your business manages returns directly impacts customer loyalty and sales. 79% of consumers expect return shipping to be free, while only 49% of online retailers provide this service. 92% of shoppers say how easy the returns process is has a significant impact on their decision to buy again. Over 60% of consumers will read through a return policy before making a purchase. Returns have a considerable effect on your bottom line, and for a good reason: Ecommerce, by its nature, makes an acceptable return policy essential. Most of the time, e-commerce asks customers to make a purchase decision without ever having experienced or interacted with the product in person. With such a high level of uncertainty, it's unsurprising that more than half of all online shoppers look over an online retailer's returns policy before purchasing. That half of shoppers have returned something in the past year. 


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Related: Ecommerce Shipping: Your Step-by-Step Guide to Shipping


Just like a shipping policy, it's essential to make your returns policy straightforward and crystal clear. Transparency comprises a vital aspect of e-commerce customer experience. Your business shouldn't have any hidden fees associated with returns. If you decide your customers will be responsible for any return shipping costs to cut shipping costs, you need to make sure that information is clearly stated. Once your customers' returns are on their way back to you or your e-commerce fulfillment partner, transparency is just as important. Your customers will inevitably pose questions about their refund, exchange, or return shipment status. One way to keep them posted (and satisfied) is to give your customers tracking information for their return shipment and automatic text alerts after their return has been refunded and received. 


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Your customers won't buy again, or at all, if your business fails to offer the e-commerce return policy that they are expecting. If your returns process is a confusing hassle, they won't come back. Conversely, if you build a seamless, transparent process and policy, your brand loyalty will go up-and, so will your bottom line. 


2020 Statistics On Ecommerce Returns


As online sales creep up every year, so do e-commerce return rates. Here are some key factors to consider about the current world of e-commerce returns:


Free returns are standard.


Like with same-day and two-day shipping, Amazon Prime has made free returns a universal standard for most shoppers. 79% of customers say they won't buy anything from an online store that charges fees for return shipping. Even though not every business will afford free return shipping, keep in mind that just offering free return shipping may result in a large enough bump in sales that the investment pays for itself. Analyze your business shipping costs to figure out just how many additional orders it takes to break even on free return shipping. 


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Speed Is Important


Even if all other aspects of the return process is smooth, waiting too long to credit a customer can be dangerous to brand loyalty; 72% of online customers expect their refund credit within five days of a merchandise return. 88% of customers say they stop or limit shopping with a retailer if it takes too long for the refund to be credited. By ensuring your return and refund process is speedy, you are enticing customers back to your business again and again. 


Establish A Process


If you're a newbie in e-commerce, you may be tempted to deal with returns on an ad-hoc basis. As your business expands, however, investing in your returns process can pay dividends. You should have a process that makes it extremely easy for your customers to make a return, which means making your process concise and simple. 47% of customers say they want an easy-to-print return label, while 58% of costumes say they want a hassle-free return policy. Penske released a report stating that businesses who choose to invest in improving reverse logistics processes are rewarded with a 4% cost decrease and a 12% increase in customer satisfaction. 


Related: 5 Best Practices for Handling Returns


How To Proactively Reduce Returns


We've already established that building an acceptable return policy is crucial for generating customer loyalty and increasing sales. However, as the average retailer spends 8.1% of total sales on reverse logistics, reducing the overall return volume is also a great idea. 


Make The Product Descriptions Clear


A common theme in online shopping is: What you see isn't always what you get. That's why 88% of shoppers say detailed product content is an essential factor in their purchasing decision. To lower return rates, make sure the information about your product is accurate. If your customers receive products that are on par with their expectations, they won't be as likely to return that product. The product pages on your website should include high-quality, updated product photos, and descriptive captions. 


Have A Longer Return Time Window


Generally, customers expect at least 30 days to return an online purchase. However, 5% of shoppers say they return online orders more than 30 days after buying them. Being lenient with return time limits (e.g., a 60-day vs. 30-day policy) can lower your return rate because it reduces the customer's urgency around returns. 


Conduct Regular Quality Testing


If you're getting a high rate on returned items, but your product page accurately reflects the product, then the problem may lie with the item itself. Do product testing, check in with your manufacturer to address any production or quality issues, and assess the item's quality. 


Look For Trends In Commonly Returned Items


One way to do this is to include an easy one-question survey in the returns process asking why a customer decided to return it. Customers should be happy to select a return reason from a list of preset options if your returns process is easy to complete. This can be especially useful in pinpointing a quality issue with a product; for example, if you're selling apparel, you can quickly identify a fit problem. If clothing items are continually being returned with complaints they're too large; then you may want to talk with your manufacturer about a sizing issue. Gathering information on the return side can help you discover any issues and trends with your products and improve future inventory. 


Related: How to Be a Successful International E-Commerce Brand


Establishing a good return process and lowering your return rate is key to success in e-commerce. Parcll is a leading e-Commerce delivery solution offering cross-border DDP solutions. Work with Parcll for reliable, efficient shipping solutions today!


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