It’s upsetting to get a return request from a customer, no matter what the reason. It may be discouraging, knowing that your product didn’t meet the customer’s expectations, or that the product was damaged during shipping. Either situation can result in a loss of profitability for your ecommerce business. For those reasons, it may be tempting to ignore the problem, leaving returns and exchanges unaddressed.
However, if you do that, you’re likely to get complaints regarding your return policy, and those complaints can quickly cause even more damaging effects on your business. Dissatisfied customers are likely to leave negative reviews and comments on your social media and Google reviews. This will adversely affect your overall business reputation. When customers express bad sentiments about the experience they had buying from your online store, it’s only a matter of time until you see a decrease in conversion rates.
In this post, we’ll take a look at the value of good return policies and some best practices of doing so.
Know the Worth of Returns vs. Customer Service
There may be some instances where it’s actually worth more to send a replacement item and let the buyer keep the original product, even if you eat some of your profit. Before making a decision like this, you need to know all applicable variables: cost of return shipping, cost of processing return, and profit loss on the item. Sometimes though, a small (or near insignificant) loss will lead to a huge gain later – a customer so impressed with your service will not only shop from you again, but they’ll refer friends. More importantly, 92% of online shoppers will buy from a store again if they have a positive return experience.
Best Practices for a Successful Return Policy
The following best practices will help ensure that your customers are fully informed about your return policy and that they remain satisfied, repeat customers in the event that they need to make a return.
#1 – Make your return policy clear and easy to understand.
Many ecommerce retailers make the mistake of creating a return policy that’s hard to grasp. This is mostly unintentional, but there are some retailers who purposefully write a vague, confusing return policy in hopes of deterring buyers from attempting a return.
Don’t do that.
Instead, clearly outline the rules regarding returns. Give buyers a list of what you’ll provide (for example, pre-paid return postage), whether or not you accept returns at your brick and mortar location (if you have one), and contact info, in case they need further assistance.
Step-by-step instructions for how to complete a return will make the process simple for customers and may prevent delays in processing the return.
#2 – Make it easy to find your return policy.
Retailers will often unintentionally bury a link to their return policy on their site. This isn’t a good idea. When you make the site location of your return policy painfully obvious, it lets buyers know that you care about whether or not they were satisfied with their order, and that you’re going to make it easy on them to file a return.
It’s not just hearsay to claim that it matters to buyers whether or not they feel a business cares about them. A reported 68% of customers will stop supporting a brand if they feel that the company is indifferent towards them. Lead your buyers to the return policy, and they’ll remain loyal to your brand.
#3 – Offer free returns.
Offering free returns assures buyers that you do care about them (and pacifies the 68% that would leave you if you didn’t).
Aside from providing buyers with great customer service, it makes good business sense.
Zappos, a popular online shoe and clothing retailer, offers free shipping both ways. The reason for this is that Zappos customers buying the most expensive shoes also have a 50% return rate.
While that number may seem a little steep at first, consider this: with a quick search on Zappos.com for Women’s Heels and filtering results to list the highest prices first, you’ll get a lengthy page of shoes that are priced well into the thousands – the first one coming up at $2,795.
To get an estimate of what shipping charges Zappos might incur to ship those shoes, I did a quick search on Amazon for women’s shoes. Based on those results, it would cost around $6 to ship these shoes to my address (with standard shipping).
Given the return rate, if two customers bought the nearly $3k shoes, and one of those buyers returned the pair, Zappos would likely be eating under $20 in shipping costs. $20 bucks for a thousand-dollar sale is not bad – especially when that customer is 95% likely to shop from Zappos again.
Whatever you may lose on the return, you’ll more than make up for it in return sales.
#4 – Include return instructions in every package.
Don’t let your website be the only place you provide buyers with detailed return instructions.
Even though your policy should be easy to find on your site, not all buyers will check there. Some aren’t tech savvy. Others just don’t want to spend the time looking for it.
Make it super easy for these buyers by inserting a note in your packages that details your return policy, as well as the contact information for your support team. The more transparent you are with your return policy, the better.
Final Thoughts about Ecommerce Return Policies
Letting buyers feel like you have their back in the event of a return, will establish trust. In a world where ecommerce lacks the face-to-face “hello” of brick and mortar shopping, buyer trust is how we steward repeat customers. A transparent, easy-to-follow and readily available return policy yields greater brand loyalty, and that means more sales.
Editor’s Note: This blog post was originally published January 2016 and was updated in July 2020 to reflect more accurate and relevant information.