Implementing a good ecommerce return policy is one of the most profitable decisions your brand can make. Engineering the right policy will mitigate anxieties, increase conversion, and cut down marketing costs by building long term customer loyalty.
What is the ultimate return policy? We’d describe it as an effortless experience driven by a self-service flow that empowers users with proactivity and clarity. It firmly lays down the ground rules to maximize agent efficiency, but manages to remain flexible, intuitive, and fair for customers at the same time.
If this sounds daunting, or unachievable, don’t worry! We’ve put together this handy return policy checklist to help you cover all the bases. Whether you’re currently at the drawing board trying to draft your first policy or working toward enhancing your existing flow – there’s something here for you.
Setting Expectations: Planning Your Policy
“34% of people in the US said they would return at least one of the gifts they got this holiday season.” – National Retail Federation.
“Unfortunately, due to an increase in return fraud, retailers are being forced to strike a delicate balance between servicing loyal shoppers and discouraging opportunistic criminals.” – Joseph LaRocca, VP of LP, National Retail Federation.
“Building trust through transparency isn’t just about attracting new business. More than that, transparency is about growing customer relationships capable of withstanding difficult challenges.” – Michael Weinhouse, Founder/Co-CEO, Logical Position
Adding a pre printed returns label to each package eliminates customer pain points and creates an effortless experience.
However, when you consider the cost of labels over time, higher rate of avoidable returns, and lack of customer insight, it becomes clear that this isn’t the smartest strategy.
Three benefits of implementing return label generator for your customers:
The Average Cost of a Pre-Printed Return Label is Between $.20-$.45.
“62% ‘would buy again’ from a brand offering free returns or exchanges.” – Dotcom Distribution
“92% of shoppers say they would buy something again if they are happy with the return policy.”
– econsultancy
Having your items shipped all over the world is a big chance for extra revenue, but requires a well-planned international returns policy. Brands who sell low priced items may be able to simply write the expense off, offering customers a full refund without shipping the product back. This is not an appropriate solution for brands selling more expensive items.
Segment international buyers and create a unique policy that minimizes profit loss while remaining fair. By creating a policy specifically for your global customers you can protect your bottom line and avoid limiting the generosity of your domestic returns.
“Global e-commerce sales are projected to reach $4.5 trillion by 2021.” – Asendia
Clearly communicate your RMA ecommerce process to customers. By getting the policy “on paper” you avoid handling each return on a one by one basis, which is both costly and inefficient. Make sure you hit all the important customer questions, such as:
“Great refund policies encourage customers to commit to a purchase and allow them to shop without fear of consequence.” – BigCommerce
“Only 5% of shoppers say they return online orders more than 30 days after purchase.” – ShipBob
“$40 billion in extended warranties are sold annually in the US market.” – Warranty Week
Accesibility: Your Policy in Action
“1/3 of holiday shoppers say a store’s return policy is an important factor when deciding which retailer to shop.” – National Retail Federation
“Would you rather your customers keep a product they didn’t love, or would you rather have a happy customer with an exchange?” – BigCommerce
“68% of shoppers check a website’s return and exchange policy before making a purchase.” – UPS
“50% of consumers believe online return policies are too complex and/or difficult.” – Spork Marketing
“Around 49% of retailers offer free return shipping.” – econsultancy
“68% of businesses have lost a customer because they feel a company is indifferent to them.”
– Shopify
“91% of users say they’ll revisit a retailer after using a coupon.” – vouchercloud
Keep your returns flow simple by providing a clear ‘how to’ section that clears up any potential confusion. This creates a frictionless experience for customers and frees up your support team’s phones at the same time!
“81% of shoppers want simple, easy, & free returns.” – econsultancy
The best retail experience is one that provides options, especially when it comes to returns. Equally promote in-store and mail back options during the returns process so the customer can choose accordingly.
Some customers don’t have time to make it to a brick & mortar location, but others don’t want to pay return shipping. Make them aware that you have suitable options for both scenarios!
“62% of shoppers are more likely to shop online if they can return an item in-store.” – Invesp
Many online retailers have taken to displaying their returns policy through simple, easy to understand illustrations.
While it may be hard to summarize all of the fine print this way, visually representing the basic principles of your process is a very effective way to drive the point home with your customers.
Those who wish to look further into the details can switch over to the written version of your policy at any time, since this is an add on and not a replacement.
“Visuals are processed 60,000x faster than text.” – Visual Teaching Alliance
Without the right returns management software, reverse logistics could mean a lot of work for your ecommerce customer service policy. Offer customers the same experience they initially got when they ordered the product. Tracking, proactive shipment updates, etc are all equally as important during the returns process!
Most importantly, customers want to know when you get the package and when they can expect their money back. Mitigate these anxieties through transparency and say goodbye to ‘when do I get my refund?’ phone calls.
“In some categories 20-30% of goods get returned.” – NPR
You’ve developed a well thought out returns policy, produced clear documentation, and even have an illustrated guide on your website. Only one question remains; if you’ve made that information easily available to your customers.
Erase all doubt by including a copy of the returns instructions in the box. This saves time for the customer by eliminating the need to search for the details, creating a smooth effortless experience from the start.
“92% of consumers will buy something again if returns are easy.” – Invesp
Structure: Your Policy Behind the Scenes
Pre-printed labels are convenient for customers, but they are not the most efficient option for retailers. These labels result in a ton of boxes sitting in the corner of your warehouse for months – with no idea why they’ve been returned in the first place!
Switching over to a self service returns management software lets you gather crucial data with each return. Not only will this data help get goods back on the sales floor faster, it will point out repeating trends in the products being returned.
“Americans returned $260 billion in merchandise to retailers.” – National Retail Federation
Ask customers the right questions to discover any underlying trends in your ecommerce return statistics. Some examples include:
“20% of consumers made a return because they received damaged products.” – econsultancy
There’s a lot on the line when a situation is escalated to the customer service team. The loyalty you worked so hard to earn can disappear after just one bad experience. Agents need to be equipped with confidence and a healthy attitude to productively handle issues.
Give agents instant access to all relevant information by utilizing a self-service returns solution and integrating with a platform like Zendesk. Empower them to make decisions and use their best judgement to foster a happy, productive work environment.
“66% of customers switch companies due to poor service.” – Accenture
Integrating order updates from your ERP back into your ecommerce store is complex. If your brand is currently having a hard time trying to make this work, we may have some good news. This integration can actually be skipped if the information can be pulled directly from an order management system (or WeSupply), and from there you can easily manage returns.
“79% of ERP implementation projects missed their promised deadlines.” – Stichfix
Third-party payment systems like PayPal are getting more integrated into the ecommerce world every year. Leverage some of their features, such as ‘Return Shipping on Us’ to help build customer trust during the consideration stage.
Knowing they won’t get stuck with an extra fee could be all the motivation needed to make an online shopping with a brand the customer is unfamiliar with!
“PayPal offers ‘Return Shipping on Us’ to get refunded for up to $30 on 12 eligible purchases a year.” – PayPal
Offering an effortless experience to your customers begins with cross-departmental collaboration within your organization. Increase synergy and efficiency through better communication, especially between customer-facing teams.
There’s nothing more frustrating than getting two different answers for the same question, especially during the returns process when tensions are already high. Don’t let miscommunication between departments be the cause of customer disloyalty.
“65% of consumers are frustrated by cross-channel inconsistencies.” – Accenture
Re-engagement: Driving Sales with Your Policy
There are a large number of customers who prefer to return online purchases to a physical store. Some like this option because it’s faster, while some simply want to avoid paying return shipping costs.
Whatever the reason, leveraging your brick & mortar locations for returns is a distinct advantage over ecommerce-only brands. Turn their trip into a positive touchpoint in the customer relationship by delighting them with products, promos, and an effortless experience.
Be sure to offer equal representation for both in store and mail back returns so customers can easily pick the option that works best for them.
“38% of retailers reported an increase in BORIS returns in 2018.” – National Retail Federation
Store credit refunds are a win-win situation for customers and brand owners. The customer doesn’t have to wait for money to hit their account, and the brand knows they’re not taking a loss on the original sale.
Giving customers instant access to funds has a psychological effect that leads to increased spending. It’s common to see customers spending more than the refund amount as soon as they get this “free” money.
Store credit refunds also allow you to create a more flexible policy especially when it comes to extending return windows. More brands are looking to improve the average ecommerce return rate and are experimenting with different methods of incentivizing customers to choose store credit, such as offering a slightly higher amount than the cash value. Despite the slightly bigger margin hit, this offers the brand a chance to create a positive touchpoint, ending on a high note to maintain customer retention. Average refund rate ecommerce is lower when store credit option is enabled.
“The bottom line is that store credit offers you flexibility and an added tool to help inspire customer spending and loyalty.” – Shopify
By providing an effortless experience for customers making a return you can turn the interaction into a positive, loyalty building touchpoint. Be proactive in giving your customers the tools to handle easy issues on their own so they don’t need to waste their time on the phone with agents.
Keep the returns flow intuitive and empower them to be self-sufficient throughout. By showing the customer that the returns process can be quick and easy you build retention by mitigating any future fears of post-purchase dissonance.
“96% of customers reporting high-effort experiences do not become repeat purchasers, compared with only 9% of those with low-effort experiences.” – BigCommerce
It says a lot when a customer chooses to make an exchange over a return. Small adjustments aside, they still want the product. Deliver a great customer experience to build loyalty and turn exchanges into more online sales. Use the exchange touchpoint to show customers products that work great with, or enhance, what they’ve already purchased!
No matter the method of exchange, there’s an easy way to upsell:
“18% of the customers prefer exchanges as a refund method.” – Shopify
Customer Behavior: The Right Policy
for the Right Audience
Make life easier for gift-givers during the holiday season by adjusting your returns policy. Give the recipient the ability to look up their order and make a return without the original purchaser’s account. Being able to look up past purchases avoids issues of missing gift receipts or packing slips.
Not only will this increase the chance of purchase at the beginning, but provides a chance to turn the gift recipient into a loyal customer through this positive rma process.
“40% of surveyed gift recipients returned at least one item in 2017.” – Small Business Trends
In the past, a customer knew that if they lost the receipt it meant they were stuck with an item forever. Fortunately, those days are long gone (even if some brands refuse to admit it).
Offer customers the option to look up their order detail page by entering the email address used to purchase. Here they can access all previous transactions associated with that email, as well as initiate the returns process and generate their own label after your approval.
“58% of customers say they want a hassle-free return policy.” – Ivesp
Returns management is complex, especially for ecommerce platforms carrying lots of different products. Establish ground rules with a layered, flexible policy that minimizes room for interpretation by your customers and team.
Empower agents to make decisions while helping customers on a case by case basis, but give them a bulletproof policy to fall back on. This ensures true returns compliance, with the right rules being applied to the right products at all times.
“About 6.5% or $22.6 billion of returns were labeled fraud or abuse of store return policies. That includes falsifying receipts to profit or buying something with the intention of wearing it once before returning it.” – BigCommerce
Fitting Roomer customers sit on the fine line between honest and fraudulent returns. They are looking to recreate the in-store experience of trying on multiple versions of the same product to pick the best one. Typically these shoppers order an item in various sizes and colors in order to nail the look they’re going for.
This is a challenge to your returns management process, but there are several product page optimizations that can help reduce the volume. Focus on clear imagery, detailed product descriptions, and an accurate sizing chart, to give customers a better idea of what to expect. Consider adding an FAQ or review section to the product page to further reduce size selection anxieties.
“19% of surveyed shoppers admit to ordering multiple versions of the same item so they can make their mind up once they’re delivered.” – Barclaycard
10% of Wardrobing customers admit to being motivated by their reputation on social media, saying they take photos for Facebook and Instagram before returning the item. Whether these customers are looking for social media points or a night out on the town in a new dress, the “try before you buy” phenomenon presents a big uptick to the fashion ecommerce return rate.
Alpha High Theft Solutions has introduced a device called the Shark Tag to help fight back. This anti-tampering tag is placed on an article of clothing in an obvious place. The customer would need to remove this tag if they wanted to wear the item out, which would signify to the retailer that the return could be voided. The fairness of your policy is not compromised because shoppers can still try items on at home and return as usual.
“40% of retailers have seen wardrobing increase, and 44% agreed that their margins are being strongly impacted.” – BrightPearl
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For nearly three decades, Vintage King personnel has been committed to equipping customers with the very best audio equipment, advice, and personal services across the globe.
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