Returns: An Essential Part of Ecommerce Holiday Success!

Like most online retailers, you probably started preparing for the holiday season months ago. Planning inventory allocations and promotions to drive sales as well as marketing campaigns to bring relevant traffic to your ecommerce store. While it may seem like you’ve planned for everything, you are forgetting a valuable piece of the customer experience; returns.

Dealing with returned or exchanged products is definitely a year round inevitably for online businesses. However, as holidays sales peak the return rate will climb as well. According to UPS, they expect to single-handily move 1.6 million returns per day the week before Christmas Day in 2019. They attribute this high volume to an influx of promotions that will have customers buying early.

The surplus of packages coming back to your warehouse can present several issues for your online store. Perhaps the greatest of these is the threat to your customer retention.

82% of US-based shoppers say they left a brand due to a poor customer service experience. We agree that this isn’t exactly the most uplifting statistic, but that doesn’t mean retention is a lost cause. 60-70% of customers will do business with a company again if it deals with a service issue fairly. This mentality applies even if the interaction doesn’t end in their favor.

Let’s take a look at four ways to use returns to boost holiday conversion and increase long term customer retention. There’s no better time to optimize than before the online shopping boom of November and December!

Offer an Easy, Transparent Policy

Your policy may seem straightforward to you, but do your customers feel the same way? Before you answer, consider that over 50% of surveyed consumers feel that online return policies are too complex or difficult. Spork Marketing highlights the importance of that statistic by adding that one in ten customers compare brands based on this very fact.

Engineering a fair, transparent policy increases conversion as it mitigates the risk for potential post-purchase dissonance. Transparency is especially helpful for small businesses who don’t have decades of brand marketing to put potential shoppers at ease. Getting rid of these pre-purchase anxieties is a surefire way to elevate above your competition this holiday season.

Another important tip is to make your policy easily accessible. According to Accenture, 60% of customers view the returns page before deciding to make a purchase. Hiding the policy deep in a terms and conditions page is more likely to cause cart abandonment than mitigate returns.

Instead of searching your site for hard to find information, customers will leave in favor of your competition. Save the sale by making it easy for them and linking the return policy from the product page!

Extend Your Policy for the Holidays

Many brands offer a standard 30 day return policy for their products, but that may not be enough for holiday shoppers.

“Gone are the days where returns were isolated to January. Today’s empowered consumers will be sending packages back to retailers all season long.” – Kevin Warren, UPS Chief Marketing Officer.

By extending your policy before the holidays you alleviate potential pain points for new customers and gifters alike. In both situations, the purchase has an increased risk factor as the customer isn’t totally sure if they, or the gift recipient, will love the product. While it may seem like a bad idea to offer a longer return window, studies show you shouldn’t worry. In actuality, the longer a customer holds an item in their possession, the less likely they are to send it back!

Turn the Returns Process Into a Positive Touchpoint

While returns are inevitable, their effect does not have to be. When handled incorrectly returns typically result in disloyalty and can add up to damage your margin. By offering an effortless experience, you can change the customer’s perception and actually use this event to build a lasting relationship. This boost in retention is critical to your success as Small Business Trends notes that 80% of future profits will come from just 20% of your existing customers.

The two quickest ways to create a positive experience are to focus on self-service and allow flexibility. A self service returns flow empowers customers to handle common issues on their own. This saves them from spending time on the phone with your agents and makes the process feel easier and less stressful.

Offering flexibility in how the customer receives their refund is also important. While most may opt for the classic “mail back / cash refund” scenario, it is important that you provide other options as well.

In store returns are a big advantage over your online-only competition, with 62% of shoppers more likely to shop if they can return to a brick and mortar location. Getting them through your doors also offers you a great opportunity to delight them with your latest products and promotions, increasing the chance they’ll purchase with you again.

Issuing refunds through gift cards or store credit appeals to impatient customers who simply don’t want to wait. Instant access to funds also increases the urge to spend, so the likelihood of repurchase is very high!

Learn From Your Returns

So far we’ve talked largely about how to optimize the returns process for your customers, but this can present a positive touchpoint for you as well. By engineering a self-service returns flow, you will gather valuable data from your customers that can lead to clear, business-driving action items.

When the customer initiates their return through the “my account” page, you can customize which questions to ask. Find out why they’re returning their products so you can get ahead of any potential issues. Perhaps the fit of the item was off, and the sizing chart on the product page needs to be adjusted. Or, maybe the color wasn’t as described meaning that the product photography needs to be updated.

The possibilities are endless, but the bottom line is that implementing a system for collecting return reason data is the only viable way to reduce returns and drive future revenue in the long term. Plus, having this information readily available before the package arrives back at your warehouse avoids those overwhelming pile up situations that can so easily occur during peak season. Knowing ahead of time keeps the warehouse clean and gets the products back on the sales floor quickly.