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One of the biggest challenges e-commerce businesses face is dealing with customer returns. The return rate for online businesses is more than twice that of brick-and-mortar places. In fact, almost one in three online purchases end up being returned by the consumer.
While inconvenient for businesses, liberal return policies are necessary as shoppers value tactile input when making decisions and are less likely to buy items that they cannot touch first. Because of this, online businesses must have more flexible return policies in order to keep customers happy.
What can e-commerce retailers do to lower return rates? The first step is to understand the reasons that customers return products after purchasing them.
Common Reasons for Returns
Online businesses are expected to have more lax return policies, but these policies may actually increase the number of returns your company receives. It’s simply a matter of customers making returns because you make it easy for them. That doesn’t, however, mean that you should tighten up your return policies – lenient rules regarding returns are essential for online sellers.
If your business has a lot of special promotional deals or heavily discounted items, your return rate may increase due to impulse buys from shoppers. That means that you have to make sure that you utilize sales and discounts wisely.
Incorrect sizing/dimensions, receiving damaged items, items not meeting the consumers’ expectations, and discrepancies between the product’s appearance online and in-person account for most returns of goods bought online.
Mitigating Reasons for Returns
Now that you understand some of the reasons that customers return products they buy online, it’s important to come up with some solutions that will help keep return rates low and revenue coming in.
#1 – Rethink Free Return Policy
Use caution, but really consider not always offering free returns. While you may initially think that offering free returns is just a good way to make more sales, it may actually be incentivizing customers to make more returns as there is no cost to them for returning those items. Some sources disagree as to whether or not straying away from a free return policy is a good idea. Some consumers will decide not to buy from an online retailer if they’re unhappy with that company’s return policy. Ultimately, you have to decide if your buyers are taking advantage of lenient policies. Some A/B testing might be necessary to figure that out.
#2 – Rethink Return Timeframes
Consider shortening the amount of time your customers have to return unwanted items. Online shoppers will often wait until the last minute to return their unwanted purchases. This can impact companies negatively because it makes keeping an accurate track of inventory and profit margins even more difficult, which can affect a company’s budget.
#3 – Provide Sizing Tools
If you run an online apparel company, consider adding online sizing and measurement tools to your product pages to help customers find the correct size of clothing. This will help your buyers get sizes right the first time they purchase, eliminating the need to return for different sizes.
#4 – Utilize Surveys
If you’re a fashion retailer, it’s a great idea to start your customer’s shopping experience with a survey designed to find out what they actually prefer to wear. Another smart option is putting photos in your survey, so you can get a better sense of what will make their shopping experience the most fun and easy it could possibly be.
#5 – Pay Attention to Packaging
Pay closer attention to your packing materials. While it may seem worth it to put all of your focus on the actual products your company sells, it is vital to pay attention to packaging as well. During shipping, packages are liable to get dropped and be handled roughly in general. This means it is important to make sure the items you’re shipping are protected by good packing materials and are in an appropriately sized box. Consider custom packaging, as it makes consumers more likely to come back to your site for repeat purchases.
#6 – Stay Close to Your Warehouse or Fulfillment Center
Remember the importance of order fulfillment accuracy, and make sure you’re keeping a close relationship with your warehouse or fulfillment center. Many e-commerce retailers partner with a fulfillment center. This allows you to outsource to a third-party provider to store your inventory, pack and ship orders, and process returns. When it comes to keeping track of your inventory, consider using techniques like dropshipping, consignment, and backordering.
#7 — Solicit Feedback – and Act on It
Each customer return is a potential learning experience. Make sure you have a system of collecting and categorizing the reason for returns. Chances are, you’ll get very clear ideas of how to improve your product page(s) to cut down on your return rate – for instance, if you get a shirt returned because “it looked like a darker red in the photo,” make sure you change your photo to reflect the shirt’s real color. If you hear that your bunk bed doesn’t have enough room for a child to sit up on the lower bunk, add a “lower bunk clearance” spec to the product details.
To Sum It All Up
When it comes to having an online business, having to deal with returns from dissatisfied customers is one of the more significant issues. Because online retailers are considerably more likely to face returns than retailers with brick-and-mortar stores because of their lack of tactile input, it’s important to take precautions to protect your store from losing money through those returns. By taking action to avoid things like incorrect sizing, customers receiving their items damaged, items not meeting the consumers’ expectations, and discrepancies between the product’s appearance online and in person, your online business can avoid returns and maximize profits.