Product returns are an inevitable part of running an e-commerce business. They cannot be disposed of, so providing the ability to return items can be a critical part of a business strategy.
As the saying goes, “If you have too few returns, you aren’t selling enough.” Still, most ecommerce businesses want to reduce the number of returns to process.
The E-Commerce Times spoke to several e-commerce experts to get their thoughts on what causes returns, how to handle rejected orders, and ultimately prevent them from happening in the first place.
“Many companies are focusing all of their efforts on sales, but not spending the same energy looking at all the returns and how to improve the experience, which can have a better ROI than just increasing sales and marketing.” , Nate Burke, CEO of Diginius, explained to the E-Commerce Times.
Since returns are a part of e-commerce life, dealing with them efficiently is a critical part of any e-commerce business plan.
“Returns cannot and should not be eliminated, but they can certainly be better managed,” advised Matthew Merrilees, CEO North America of Global-e. “They actually offer an opportunity to build trust between the retailer and the customer. ”
The Case for Reducing Returns
Returns cost money and time and may damage products or make them unnecessary, so it makes sense to cut back on them for most businesses.
“The very nature of having to pack and ship products back and forth means that the more returns, the more likely the product will be damaged,” said Lucy Kelly, artist and owner of bel. monili, at E-Commerce. Times.
“As an eCommerce business owner, you want to create the best possible experience for your customer, which means they should be happy with their purchase the moment they open it,” she said. for follow-up. “By creating that expectation and that experience, your customers will be much less likely to request a refund and much more likely to share their positive experiences with others. “
Taking steps to reduce the number of returns is good business for a number of reasons.
“There are many benefits to reducing your company’s product returns,” said Karina Shivdasani, Founder and CEO of Common Assembly. “Return can be a big deal in the world of e-commerce. It lowers your profit margins, negatively impacts the environment, and threatens your entire business.”
Additionally, she noted, “It may require you to hire more workers, increase your warehouse space, or deal with wobbly logistics. Ultimately: it hurts your brand and the profitability of the company. “
For this reason, having a clear returns policy – and making sure that this policy is in the best interest of the business and ultimately minimizes returns – is an essential part of running an e-commerce business. .
“While offering a quality return policy and customer service processes is essential for small businesses looking to build customer loyalty, returns should be minimized as much as possible,” Jacqueline Snyder, co-founder with Minna Khounlo- Sithep, of The Product Boss, told the E-Commerce Times.
“The extremely high return rate is a serious plague for retailers at this stage, so there are financial costs and opportunity costs that absolutely have to be considered when establishing a policy,” he said. she said.
Go to the root of returns
There are various reasons why consumers return items, and ecommerce businesses should be aware of the cause of their particular returns. Evaluating and understanding why returns are occurring can help a business create strategies to reduce them.
“Monitor all reasons for returns and resolve basic issues, such as quality issues, product descriptions on the website, packaging issues, photography, better fit guides, consistent measurements, phone support, ”Burke explained.
For products crossing international borders, there are many unique reasons why products may be returned, and companies selling in international markets should take this into account.
“Our data indicates that the most common reason for cross-border e-commerce consumer product returns, over 50%, is related to size and fit,” Merrilees noted.
“But other reasons for return can be avoided. Sometimes consumers receive a package just to find out about taxes and shipping charges that they weren’t aware of in advance during the ordering process. This translates into higher return rates and very dissatisfied customers, not to mention the logistics costs for the merchant on the outward and return journeys.
“These returns can be avoided by providing international consumers with a calculation of all duties and taxes associated with their purchase and allowing them to be prepaid at checkout. Or, in many cases, an even better solution is to present international customers with prices that include local prices. duties and taxes according to the local price display convention for this market, ”he explained.
How to reduce returned orders
Once a business understands why returns are happening, they can take action to mitigate those events.
Sometimes it’s just a matter of making sure product photos and other sales and marketing materials are accurate, so consumers know exactly what they’re ordering.
“Make sure you have crisp, clear product photos that accurately show the size, color and use of your product,” Kelly said. “Scale is important. You want to be able to show how the product would fit into everyday use by having style or lifestyle photos showing the product being used. “
Various actions can be taken by companies to reduce returns, depending on why they are happening in the first place.
“There are several avenues that retailers can take to reduce their rate of product return,” explained Khounlo-Sithep. “We suggest starting with quality control. Add an additional checkpoint so that all packages are examined once more before shipping for any errors and / or damage to the product.
“If that’s too much for you alone, outsource. Bring an extra pair of hands or maybe embrace new inventory management software to help you fill orders with greater accuracy.”
Making sure products are described correctly can be another key to reducing returns.
“We recommend that you re-examine your site to make sure that the product descriptions match what you send to customers and that you accurately represent the product with high quality images and / or videos,” Khounlo-Sithep added. . “It can help tremendously with customer expectations and address some of the more common occurrences that we see at retailers with high return rates. “
Finally, inviting customer feedback can help avoid returns in the first place.
“Encourage customer reviews with every purchase. Reviews these days can really make or break a product,” said Khounlo-Sithep. “Ask real people to write down their sincere experiences with [or when] using the product is a great way to help your customers make a more informed decision. ”
Returns management process
Ultimately, since it is impossible to completely eliminate returns, it is essential to develop a return policy and system that maintains a company’s profitability.
“Depending on the company, returns can be fully automated in the online process,” Burke said. “Some companies want to interact with the customer through a hotline to authorize returns and try to work with the customer on an alternate solution if possible.”
“Either way,” he concluded, “documenting all processes and talking to customers to identify the reasons for returns and how to handle them smoothly is crucial for a profitable and scalable online business.”