“It’s the thought that counts.” What a lovely sentiment for everyone except retailers, who know that phrase is often followed by, “did you keep the receipt?”
This year, don’t let returns spoil your Q4 profits or holiday cheer. While returns are sometimes inevitable in ecommerce, online retailers can still take a few smart precautions to minimize their losses and retain those holdings to reinvest in the new year.
Below, we give 7 tips on how you can prevent holiday returns. Apply them now to give yourself a little gift this season.
1. Segment Risky Customers
Don’t always blame yourself for customer returns. There’s a certain type of consumer known as a “serial returner” who returns a high proportion of products they buy, often abusing return policies and exploiting loopholes. Based on the data, these customers never seem satisfied.
Try to identify serial returners in your customer base by their sales data and segment them. If the shoe fits… they’ll probably still return it anyway.
In minor cases, you can simply stop sending them promotional material to decrease their chances of buying-and-returning, but in more serious cases you can ban the customer and save yourself the costs of processing their future returns.
2. Extend Your Time Frame for Returns
This sounds counter-intuitive — wouldn’t a longer return window increase returns? But consider the Endowment Effect, where the longer someone owns a product, the more they value it, and it makes more sense.
A longer time frame for returns takes the pressure off of customers. They feel more at liberty to try the product out and give it more chances. Compare that to the opposite, a short window for returns, and customers are more likely to return out of panic in fear of missing the window.
3. Display Returns Policies Prominently
Customers usually don’t like returns either. It’s better to be up front about what they’ll have to go through for a return, so they know what they’re getting into beforehand. This also polarizes them one way or another — I’m going to buy this and not return it, or I’m not going to buy this because I don’t want to return it. The only sales you’d lose are the ones that would ultimately become returns.
It’s best to display your return policies front and center on your online store. If you have a lenient returns policy with a long window, mentioned above, it adds even more incentive to buy. In fact, 63% of online shoppers in the U.S. won’t complete a purchase unless they see the returns policy first.
4. More Descriptive Product Pages
A large chunk of holiday returns can be chalked up to, “it’s not what I expected.” By that logic, you can reduce the number of returns by giving shoppers a better idea of what to expect through more descriptive product pages.
There are a few different ways to present your product more accurately, and you should employ as many as you can:
- High-quality product photos — they give shoppers a better sense of the product’s actual appearance and other aspects like texture or fluidity. (Read our guide on taking professional-level product photos here.)
- Descriptive text copy — use your product descriptions to explain features, uses, and tips for making the most out of the item
- Videos — videos let shoppers see the product in motion, making it easier to imagine the item in person
- Sizing charts — for apparel, the more accurate and informative your sizing charts, the fewer returns you’ll have due to poor fitting
- Brand comparisons — product comparison charts lay out all the variations and feature differences between two products so customers can select the one that suits their preferences.
5. Improve Your Reverse Logistics
As mentioned above, some returns are inescapable. The most sure-fire way to minimize return costs is to use a more cost-effective returns process. Explore all options for your reverse logistics and treat it with the same importance as you do outgoing shipments. Some of the most effective methods include:
- Buying shipping supplies in bulk for price cuts
- Getting discounted shipping rates
- Use poly-bags instead of boxes (for non-fragile products)
- Review return requests for fraud
You can even outsource your returns to a 3P service. Specifically, if your return center is closer to where most of your customers live, you’ll save more money on shipping and postage, which partially justifies the cost of hiring a 3P service in the first place.
6. Streamline Order Processing for Less Internal Errors
More often than you might think, returns result from a retailer’s mistake. According to an Invesp survey, 23% of returns come from retailers sending the wrong product, and 20% come from retailers sending a damaged product.
Online retailers must do everything they can to stem returns on their end. This often involves a structured and efficient order management system. Just by tweaking your system or monitoring orders more closely, you can reduce errors on your end and cut down on returns.
Of course, you may not always have time to review incoming orders. That’s why online retailers often turn to order control software like ecomdash to do it for them. Order control software automates the order process for more accurate shipping, not to mention faster deliveries and cheaper fulfillment, along with plenty of other benefits.
7. Collect Data on Why Customers Are Returning
It’s tempting to handle returns as quickly as possible, but don’t miss a valuable opportunity to learn from your mistakes. Always ask customers for their reason for returning — this data can reveal shortcomings in your system or inspire new fixes and workarounds.
You don’t have to be intrusive or accusatory; it could be as little as a quick question tagged on to a customer service email, or an automated pop-up survey when processing returns. After a few returns, you’ll get an idea of what needs to change to reduce your returns overall.
Crisis or Opportunity
Although not ideal, product returns still bring with them an opportunity to connect with customers — or scare them away. How you handle returns, both in your general policy and each individual interaction, makes an impression on your customer for better or worse. Handle them with aplomb, and create an environment where your customer feels comfortable shopping — and that invariably leads to repeat business.