Dealing with returns is a big part of running a business. It’s estimated that between 15 and 40 percent of online purchases are returned. In addition, Amazon wants sellers to keep their return rate under 10 percent to stay in good standing. This means that limiting the number of returns you receive is important in keeping your business profitable and running smoothly. Here are a few tips for lowering your return rate on Amazon.
Gather Data on Previous Returns
Collecting data can help show trends in your returns. Use this information to make future business decisions and lower your return rates. Some key aspects to keep track of when it comes to returns include product type and reason for a return. Knowing if more products are returned during a certain time of year, as well as the length of time between purchase and return are trends you need to watch.
Include Detailed Product Descriptions
Making sure your customer is properly informed of what they’ve purchased is important for more than just customer satisfaction. Vague or incomplete descriptions can be confusing, leading to a regretted purchase and ultimately a return. To keep your product descriptions informative, make sure you include:
- Color or color options
- Manufacturer location
- Return Policy
Create a Buyer’s Guide
Another preventative measure against returns is creating a buyer’s guide. Buyer’s guides typically use tables, charts, and infographics to help customers decide which product is right for them. It’s another great way to keep consumers completely informed of the function and intended purpose of your product.
Include Excellent Images
Increased returns can also be caused by poor product images. Be sure to include several clear photos of your catalog so shoppers have a better idea of what you’re selling. Consider taking close up photos to highlight specific features, and do your best to get photos of several angles.
Try Product Videos
Making sure your customers understand your product and how it works is vital to their satisfaction. Product videos are for business owners who wish to go above and beyond, which can help you stand out among competitors. Videos are particularly helpful when showing how your product functions. If the items you sell require at-home assembly, consider adding a step-by-step instruction video.
Help Customers Pick the Right Size
One common reason customers return products they’ve purchased, especially online, is incorrect sizing. From clothes to furniture, accidentally purchasing the wrong size product almost guarantees a return. While some sizing errors are bound to happen, the best thing you can do to avoid this issue is display sizing charts and dimensions as openly as possible. Make sure your customers can easily see the exact size of the product they’re purchasing.
Find a Niche
Products that are more common are bound to encounter more competitive pricing. Customers may opt to return your products in order to buy the same thing for less from another retailer. While to a certain degree this competition is unavoidable, the best thing you can do, aside from keeping prices low, is highlight something that sets your product apart. Niche markets often have lower returns, as their customers are looking for something more specific. In fact, having competitive prices helps ensure products are not returned because customers have found a better option elsewhere, which brings us to our next point, competitive pricing.
Keep Prices Competitive
Keeping your prices competitive is important for more than just increasing sales. Do research to find out how competitors are pricing their products to better understand the market. Here are a few great ecommerce pricing strategies to help complete your Amazon product listings.
Inspect Your Product Packages
Unboxing a new product is meant to be a special, exciting experience for customers. This means that the condition of your packaging is almost as important as the condition of the product itself. Try to think like a customer – what would you like to see when you receive and open your online purchase? Stephen Smotherman of Full Time FBA explains it this way:
“Think like an Amazon customer. If you’re an Amazon customer and you’re spending forty, fifty, sixty, or a hundred dollars on shoes, and you see that the box cover has been torn off, it doesn’t feel right for some people…Even though you might be okay with a little defect on the box, other Amazon customers are not thinking like that.”
Create a Replacement Agreement with Your Supplier
For private label sellers, you can have a supplier agree to replace returns due to defectiveness. Whether the unit is slightly damaged or doesn’t function, your supplier should foot the bill for sending bad products to Amazon. According to Manny Coats of the AM/PM podcast, you should request this credit monthly, so the supplier is not stuck with a big request at the end of the year.
Not only will this agreement help your profit margins, but it’ll also help lower your return rate by ensuring your supplier is fully invested in shipping quality items to Amazon.
Final Thoughts About Amazon Returns
Having a few returns is a normal part of running an online business. Most successful online merchants even use returns as a sales tool. However, when a few become many, it may be time to take action. Lowering your return rate can help increase profit margins and keep your business running smoothly. Use the tips above to see your return rates go down, and please share any others you’ve used in the comments below.
Editor’s Note: This blog post was originally published December 2017 and was updated in February 2021 to reflect more accurate and relevant information.