The ecommerce landscape continues to expand rapidly, but with growth comes a significant challenge: product returns. As more consumers shop online, the average ecommerce return rate is typically around 20-30%, which can lead to substantial financial losses for ecommerce businesses. The cost of returns extends beyond the price of the returned product—it includes handling, shipping, restocking, and, in many cases, lost revenue from returned products that can no longer be sold at full price. As a result, ecommerce businesses must develop effective strategies to minimize losses from returns. In this article, we’ll explore the reasons behind high return rates and present strategies to help ecommerce brands optimize their return processes, reduce return rates, and ultimately preserve their bottom lines.
Ecommerce returns are a significant concern for online retailers. The increase in online shopping has led to a rise in return rates, and as ecommerce sales continue to grow, so does the volume of returned products. According to industry statistics, returns in the ecommerce sector are estimated to make up 20-30% of total sales, significantly higher than brick-and-mortar stores where return rates typically hover around 8-9%. Customers often opt for in-person shopping at a brick-and-mortar store to avoid the complexities of online returns, demonstrating the advantages of physical retail locations in managing returns efficiently. The return rate is projected to increase as more consumers opt for online shopping, and return policies become a major consideration in purchasing decisions.
In 2021 alone, U.S. retailers faced over $761 billion in lost sales due to returns, with the cost of processing each return ranging from 20-65% of the item’s original value. These figures highlight the severe financial implications that returns have on ecommerce businesses. Beyond just the logistics of handling returns, businesses also face challenges in maintaining customer satisfaction and profitability while dealing with an increasing number of returns.
At its core, ecommerce returns refer to customer returns of purchased products to an online retailer. When customers make purchases, they are often guided by product descriptions, images, and reviews on the website. However, discrepancies between what is expected and what is received often lead to returns. For retailers, returns are a reality, but minimizing them requires an understanding of why customers return products in the first place.
Ecommerce businesses typically have return policies in place to handle the returns process. These policies outline conditions such as the time frame in which returns are accepted, procedures for requesting returns, and who bears the shipping costs. However, excessive return rates can impact a business’s bottom line, eat into profit margins, and even damage the retailer’s reputation if the process isn’t customer-friendly. As online shopping continues to thrive, implementing strategies to minimize returns is essential for maintaining profitability and customer loyalty.
Understanding the reasons behind product returns is crucial for developing strategies to reduce them. Contrary to common misconceptions, returns are not solely driven by customers who purchase multiple sizes or buy products only for temporary use. In fact, many returns are caused by issues within the retailer’s control. Below are some of the most common reasons why products are returned:
Inaccurate Product Descriptions: One of the most significant contributors to returns is inaccurate or misleading product descriptions. Customers may find that the product they receive differs from what they expected based on the online description. This could be due to incorrect sizing information, misleading color representations, or even wrong product details.
Sizing and Fit Issues: Inaccurate size charts or a lack of fit guidance can also lead to returns. Customers who purchase clothing or footwear based on inaccurate size information often find that the item does not fit, leading to a return.
Shipping Errors: Another common cause of returns is receiving the wrong item. Shipping errors, such as sending the wrong size, color, or product, can cause frustration and prompt customers to return the item.
Damaged Products: Products that arrive damaged due to poor handling or rough transit are also frequently returned. This could include issues like scratched surfaces, broken parts, or missing components.
Customer Expectations vs. Reality: Sometimes the product may simply not meet the customer’s expectations. Whether it’s the feel, quality, or functionality, customers may return items when they are not as anticipated based on online images or descriptions.
By understanding these causes, ecommerce retailers can implement strategies to address these issues and minimize returns. Additionally, collecting and analyzing customer feedback is essential to understand the reasons behind returns and improve product descriptions and policies.
The statistics surrounding ecommerce returns are stark. Research shows that return rates for online purchases are significantly higher than those for in-store purchases. On average, online return rates range from 20-30%, with some categories (like clothing and accessories) seeing even higher rates. This means that for every 10 products sold online, two to three products are returned.
The cost of returns is not just limited to the value of the product itself. Processing returns can cost businesses anywhere from 20% to 65% of the original value of the item. This includes the costs of shipping, restocking, and inspecting returned items, not to mention the lost revenue if the returned products cannot be resold at full price.
In 2021, U.S. retailers were estimated to lose over $761 billion in sales due to returned goods. This staggering number underscores the importance of developing effective returns management strategies for any ecommerce store to reduce losses and improve profit margins.
To combat the rising return rates and minimize losses, ecommerce businesses must adopt comprehensive strategies. Utilizing fulfillment services and marketing technologies to manage returns more effectively can streamline the returns process, mitigate financial losses, and enhance customer experiences, ultimately leading to a reduction in avoidable returns. Below are several proven tactics to reduce return rates and their associated costs:
The foundation of minimizing returns for any ecommerce business starts with providing accurate and detailed product information. Inaccurate product descriptions lead to customer confusion and dissatisfaction, increasing the likelihood of returns. Retailers should invest in providing clear, truthful descriptions that highlight the size, color, material, and functionality of products.
To ensure customers make informed decisions, businesses should use high-quality images and videos showcasing the product from multiple angles. Additionally, including detailed measurements and providing product specifications help customers understand exactly what they are purchasing.
A significant percentage of returns in ecommerce stores, especially in categories like clothing and footwear, are due to sizing issues. To combat this, retailers must offer comprehensive size charts and fit guides that are tailored to each product. For instance, a clothing retailer can provide specific measurements for each size, along with tips on how to measure oneself accurately.
Consider offering a virtual fitting tool or customer reviews with sizing information to help customers make the best choice. Collecting feedback from customers on how they feel the product fits can further refine your size charts and improve customer satisfaction.
Product images are the most influential factor in online store purchase decisions. To reduce returns, businesses must showcase products using high-resolution images from multiple angles. Additionally, including 360-degree views or videos of the product in use can help customers get a clearer understanding of what they are buying. This visual transparency reduces the likelihood of customers being disappointed upon receipt of the item.
Contextual images showing the product in real-life settings—such as a model wearing a dress or a sofa placed in a living room—can also help customers visualize how the product will fit into their lives.
Quality control is a cornerstone in the battle against ecommerce returns. By implementing stringent quality control measures, businesses can significantly reduce the number of defective or damaged products that reach customers, thereby boosting customer satisfaction and loyalty. Here are some effective quality control methods:
Quality Control Checklists: Implementing a comprehensive checklist ensures that all products meet specific standards. This checklist can include criteria such as product functionality, appearance, and packaging integrity.
Employee Training: Providing thorough training on quality control procedures equips employees with the knowledge and skills needed to identify and address potential issues.
Automated Inspection Systems: Leveraging technology, such as automated inspection systems, can enhance the accuracy and efficiency of quality control processes. These systems can detect defects or damage that might be missed during manual inspections.
Supplier Collaboration: Working closely with suppliers to ensure they adhere to quality control standards is crucial. Establishing clear expectations and conducting regular audits can help maintain product quality from the source.
By integrating these quality control methods, ecommerce businesses can reduce the number of returns due to defective or damaged products, ultimately boosting customer satisfaction and loyalty.
Reducing ecommerce return rates requires a proactive approach that focuses on improving the products customers receive. WeSupply provides powerful tools to help businesses analyze and refine their product offerings, leading to fewer returns. Here’s how:
Adjust Sizing Charts: Based on product-specific data, businesses can adjust sizing charts to better align with customer expectations, reducing size-related returns.
Review Product Images: Ensure that product images are accurate and clearly represent the items to avoid misunderstandings that could lead to returns.
Gather Customer Feedback on Fit: Collect feedback from customers on the fit and feel of products, helping to identify and address issues early.
By implementing these strategies, businesses can enhance their product offerings, improve customer satisfaction, and ultimately reduce return rates.
While it’s important to minimize returns, it’s equally crucial to have a solid strategy for handling returns when they do occur. Implementing an efficient and customer-centric return process can make a significant difference in customer retention and overall satisfaction. Combining effective returns management with outstanding customer service enhances customer satisfaction, fosters loyalty, and encourages repeat purchases.
A straightforward and easy-to-understand return policy is essential for reducing friction and building trust in customer returns. Ensure that your return policy is easy to find on your website and communicates clear terms, such as the time frame for returns, acceptable conditions for returned items, and any associated costs (like return shipping fees).
Offering exchanges, store credit, or even hassle-free returns can reduce the need for refunds and incentivize customers to make another purchase. Make the return process as seamless as possible to prevent it from becoming a source of frustration.
An automated returns management system can save time, reduce operational costs, and improve customer experience for online stores. By providing customers with a self-service returns portal, businesses can let customers initiate returns on their own, including generating return shipping labels and tracking their return status. This efficiency reduces the burden on customer support teams and speeds up the processing of returned items.
Handling ecommerce returns efficiently is essential for maintaining customer satisfaction and protecting your bottom line. WeSupply offers a range of features designed to streamline the returns process and encourage better outcomes for both businesses and customers. Here’s how:
Branded Returns Portal: Create a seamless, branded returns experience that keeps customers engaged and loyal, without directing them to confusing third-party sites.
Self-Service Returns Process: Let your customers take control with a frictionless self-service returns experience, meeting the demands of 70% of shoppers who prefer simplicity and speed.
Create Flexible Returns Rules: Adapt your return policy to different scenarios by setting customizable return conditions, like free return shipping, and smart return rules tailored to product attributes.
Returns Tracking: Provide customers with the ability to track their returns easily, offering transparency and improving trust in your process.
Proactive Return Notifications: Keep customers informed with personalized post-purchase notifications via email and SMS, which have a high open rate and can help retain customers with targeted deals.
By implementing these best practices, businesses can reduce friction in the returns process, increase customer loyalty, and optimize their return strategies for greater profitability.
Simplify Returns for Your Customers and Support Team
Book a quick call with our experts to see how WeSupply can help you: simplify the Return experience with just a few clicks, reduce customer service calls and manual processing, notify your customer about their refund, automate returns and reduce user error.
Returns not only have financial, operational, and environmental costs for ecommerce stores but also significant environmental implications. The carbon footprint associated with returns—including the packaging, transportation, and processing—can be significant. To mitigate these environmental impacts, businesses should implement sustainable returns practices:
Product Lifecycle Management: Encourage customers to recycle or return items that can be resold, reducing waste.
Sustainable Packaging: Use eco-friendly packaging to minimize waste and reduce the environmental footprint of returns.
Donation or Resale: Consider donating returned items that are in good condition or reselling them through outlet channels to avoid waste.
Building a sustainable returns process is essential for businesses looking to reduce waste, improve customer satisfaction, and lower operational costs. WeSupply offers several features to help businesses create an eco-friendly and efficient returns experience:
Generate Return Labels Automatically: Customers can easily generate return labels on their own, even when your team is unavailable, streamlining the returns process.
Printerless Returns via QR Code: With WeSupply’s printerless returns option, customers can simply use a QR code to drop off returns at participating locations, eliminating the need for printing labels.
Return In-Store or via Curbside: Customers can return items in-store or through curbside drop-off, offering convenient options that are both time-saving and eco-friendly.
Intelligent Dispositions: WeSupply optimizes the return process by directing items to the right destination—whether for restocking, liquidation, donation, or recycling—ensuring that returns are managed efficiently and sustainably.
By integrating these solutions, businesses can build a more sustainable returns process that reduces waste, enhances customer experience, and saves on operational costs.
Technology plays a pivotal role in mitigating ecommerce returns. By leveraging various technological solutions, businesses can reduce return rates, streamline the returns process, and enhance the overall customer experience.
Artificial intelligence (AI) offers powerful tools for analyzing customer data and behavior, helping businesses identify patterns and trends that may indicate a higher likelihood of returns. Here’s how AI can be utilized:
Customer Purchase History Analysis: AI can analyze purchase history and behavior to identify customers who are more likely to return products. This insight allows businesses to take proactive measures, such as offering personalized support or recommendations.
Product Return Predictions: By examining customer reviews and ratings, AI can identify products that are more likely to be returned. This information can guide inventory decisions and product improvements.
Personalized Recommendations: AI can provide personalized product recommendations based on customer purchase history and behavior. These tailored suggestions can help customers find products that better meet their needs, reducing the likelihood of returns.
By harnessing the power of AI, businesses can take proactive steps to reduce returns and enhance the overall customer experience.
Personalization is a key strategy in reducing ecommerce returns. By offering personalized experiences, businesses can ensure customers receive products that match their preferences and needs. Here’s how personalization can be implemented:
By offering personalized experiences, businesses can reduce the number of returns and improve customer satisfaction.
Ecommerce returns are an inevitable part of online retail, but with the right tools, businesses can better manage and mitigate them. WeSupply offers a technology-driven approach to understanding and reducing returns. Here’s how:
Returns Analytics: Gain valuable insights into why customers are returning products. Identify the most returned items, understand why they’re being returned, and spot serial returners. This helps reduce return rates by acting on the data.
CSAT and NPS Tracking: WeSupply tracks Customer Satisfaction (CSAT) and Net Promoter Score (NPS), helping businesses measure post-purchase experiences. By gathering and analyzing customer feedback, businesses can continuously improve their service and reduce returns.
Nosto Integration: For personalized shopping experiences, WeSupply integrates with Nosto to create customized, branded tracking pages that engage customers and promote your brand beyond the sale.
Justuno App Integration: Enhance post-purchase engagement with personalized offers, discounts, and product recommendations through the Justuno app, ensuring that customers stay engaged and satisfied after their purchase.
By leveraging these tools, businesses can understand return behaviors, enhance customer satisfaction, and reduce return rates, all while providing a more personalized and engaging post-purchase experience. Book a demo today to see how we can help your business thrive!“
Return fraud is a growing concern for any ecommerce business, and it can lead to significant losses. Fraudulent returns occur when customers return stolen goods, claim an item was never received, or frequently return products without legitimate reasons. To protect against return fraud, businesses should implement the following measures:
Track Customer Activity: Monitor customer return behavior and flag suspicious activity.
Implement AI Tools: Use AI-powered tools to detect return fraud and identify serial returners.
Set Clear Limits: Establish clear return policies, including limits on how frequently customers can return items.
Return fraud can pose a significant risk to businesses, especially when dealing with serial returners. WeSupply’s Pre-built Return Policies help businesses protect their revenue and ensure a fair process for all customers. Here’s how:
Blocklist Fraudulent Customers: The platform allows businesses to blocklist specific email addresses or customer groups known for fraudulent returns, preventing them from making further returns and safeguarding revenue.
By adopting these strategic return measures, businesses can minimize fraud, maintain profitability, and protect their brand reputation, all while offering a fair return process for genuine customers. Explore more of WeSupply’s Pre-built Return Policies to enhance your return management strategy!
Providing excellent customer service is key to reducing returns. When customers feel valued and heard, they are less likely to return products. Effective customer support can address issues before they escalate, offering solutions like product exchanges, replacements, or discounts on future purchases. Encouraging customers to leave reviews can also help others make better purchase decisions, potentially reducing returns in the long run.
Regularly assessing and improving return processes by incorporating customer feedback is essential to maintaining an effective and competitive ecommerce strategy.
A seamless and intuitive online shopping experience is crucial in mitigating ecommerce returns. By optimizing the online shopping journey, businesses can reduce the likelihood of returns due to frustration or confusion. Here are some strategies:
User-Friendly Website and Mobile App: Designing a user-friendly website and mobile app ensures customers have an easy and intuitive shopping experience. Clear navigation, fast loading times, and responsive design are key elements.
Clear Product Information: Providing clear and concise product information, including detailed descriptions, high-quality images, and accurate sizing charts, helps customers make informed decisions.
Streamlined Checkout Process: Implementing a streamlined checkout process reduces friction and improves the overall shopping experience. Simplifying steps and offering multiple payment options can enhance customer satisfaction.
By focusing on creating a seamless and intuitive online shopping experience, businesses can reduce the number of returns and boost customer satisfaction.
By integrating these new sections, the article will provide a comprehensive guide for ecommerce businesses to minimize losses from returns, leveraging quality control methods and technology to enhance customer satisfaction and loyalty.
WeSupply offers a comprehensive solution for businesses looking to enhance their customer support and satisfaction. By providing tools that keep customers informed and engaged throughout their shopping journey, businesses can foster trust and loyalty. Here’s an overview of how WeSupply’s features can help businesses improve their customer experience:
Order Tracking: Proactive order tracking notifications via email and SMS are essential for keeping customers informed without them needing to reach out. With SMS messages having a 98% open rate, businesses can deliver timely updates about order statuses, ensuring customers are always up to date.
Delivery Notifications: Proactively informing customers about any changes to their order, such as delays or shipping updates, is key to a positive customer experience. WeSupply allows businesses to send delivery notifications that keep customers in the loop, preventing the need for them to inquire about their orders.
Integration with Review Platforms: WeSupply integrates with leading review platforms like Loox, Judge.me, Stamped, and others, allowing businesses to collect and display customer feedback across various channels. These integrations help generate authentic reviews, boosting credibility and driving engagement.
By leveraging these features, businesses can create a more efficient and transparent customer experience, leading to higher satisfaction, greater trust, and improved retention rates.
Combat inconvenience with proactivity & self service
Book a quick call with our experts to see how WeSupply can help you make returns easy for your customers with a beautiful, self-service solution that makes their experience easier while also providing new ways to lower costs and earn back revenue.
EVEREVE, with over 93 boutiques and a growing online presence, faced significant challenges during the COVID-19 pandemic as e-commerce sales surged by 11% in 2020. This increase led to higher return rates, reaching up to 50% in some apparel sectors. The company struggled with a manual, inefficient returns process, lack of visibility into return data, and overwhelmed customer service teams.
To address these issues, EVEREVE partnered with WeSupply to automate and centralize their returns process. By integrating with platforms like Magento and Zendesk, they focused on proactivity, self-service, and return flexibility. This transformation streamlined returns, reduced support tickets, and improved operational efficiency.
The results were impressive: faster, more accurate returns, cost savings, and enhanced customer satisfaction. Customers now handle returns independently, boosting loyalty and turning returns into a strategic advantage.
Humane partnered with WeSupply to simplify the complex return and replacement processes for their bundle items. Previously, returning bundles was cumbersome, and managing individual item replacements created confusion. Additionally, inconsistent communication increased customer support queries. By integrating WeSupply with Shopify and NetSuite, Humane streamlined the process, enabling efficient bundle returns and proactive customer updates. This led to faster processing, enhanced customer satisfaction, and fewer service inquiries, ultimately improving the overall post-purchase experience and strengthening customer loyalty.
While returns are inevitable in any ecommerce business, the impact of returns on business profitability can be minimized through careful planning and execution. By providing accurate product information, improving sizing and fit guidance, optimizing return policies, and utilizing technology to streamline the returns process, ecommerce businesses can not only reduce return rates but also enhance customer satisfaction and loyalty. Implementing sustainable practices and safeguarding against return fraud can further protect both the environment and the business’s bottom line. Ultimately, returns don’t have to be a financial drain—they can be a stepping stone to better business practices and improved customer relationships.
WeSupply helps ecommerce businesses reduce losses from returns by implementing efficient, data-driven strategies. With features like SKU-level returns analytics, businesses can identify issues with products, such as size, color, or quality, and take action to improve their offerings. WeSupply also offers tools like instant credit for exchanges, flexible return rules, branded returns portals, and self-service options to enhance customer satisfaction and minimize return rates. Proactive return notifications, returns tracking, and customer feedback collection further optimize the returns process, leading to better customer retention and lower operational costs. Get started with WeSupply today and transform your returns management strategy!
WeSupply reduces return rates by offering SKU-level returns analytics, which helps identify reasons for returns at the product level, allowing businesses to improve sizing charts, product images, and gather customer feedback. The platform also encourages exchanges by offering instant store credit, which boosts sales and reduces returns. Additionally, the branded returns portal creates a seamless returns experience that fosters customer loyalty and reduces confusion.
WeSupply helps protect businesses from return fraud with tools like Green Returns, allowing customers to keep low-cost items and save on shipping, while improving satisfaction. The blocklist feature prevents known fraudsters from returning items, ensuring your revenue is protected. Flexible return rules let businesses set custom return conditions to address specific cases, helping safeguard profits.
WeSupply enhances the returns experience by offering a self-service returns process, giving customers full control and increasing satisfaction. Proactive return notifications via email and SMS keep customers informed of their return status, reducing confusion. Additionally, the printerless returns option allows customers to return items easily by using a QR code at participating locations, making the process hassle-free.
Yes, WeSupply does have an official Shopify App. You can download and begin to integrate it with your Shopify store.
Yes, WeSupply has an official extension for Magento. The WeSupply x Magento integration allows for automating order tracking experiences, reducing customer inquiries, automating shipping email and SMS notifications, and providing a fully branded order tracking experience
Yes, WeSupply has an official BigCommerce App. You can integrate WeSupply with your BigCommerce store to improve your post-purchase customer experience.
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