E-commerce News and Insights
Apr 13, 2018

E-commerce Returns 101: How to Offer Free Shipping & More

E-commerce Returns 101: How to Offer Free Shipping

E-commerce returns are too big to hide under the rug anymore. In fact, retail returns were valued at $400 billion in 2017. And according to return management software company ReturnMagic, 89 percent of consumers have returned an online purchase in the last three years. Smart online retailers are not only paying attention to their return policy but also using it to entice new and repeat sales.

So, how can you boost your e-commerce returns policy to keep customers coming back? Here are three key strategies to offer customers a seamless online returns experience.

Prevent Online Returns with Detailed Product Information

According to returns prevention software company ReturnLogic, 22 percent of online returns are due to the product being substantially different in appearance than what was advertised on the website. Spend time adding as much detail as you can to your product descriptions. And, make sure to take high-quality, real-life photos of your products.

To take it a step further, ask your customers to tag you on social media or use a specialized hashtag. Then, you can aggregate and embed those photos on your site, either manually or through social media plugins, and display them for potential customers to get a sense of what the product looks like in different settings and lighting. Plus, your existing customers will enjoy seeing their posts on your site.

Have a Clear, Hassle-free E-commerce Returns Policy

Did you know 66 percent of shoppers look at a retailer’s returns policy before purchasing—and an inconvenient returns policy deters 80 percent of consumers?

Consider your customers as you create your e-commerce returns policy. Keep in mind the top elements of a positive returns experience:

  • Free returns shipping (60 percent of respondents)
  • Hassle-free policy (51 percent of respondents)
  • Easy-to-print return labels (44 percent of respondents)
  • Timely refunds (42 percent of respondents)
  • Label in box (40 percent of respondents)

While all of these may not be doable for you, make sure to do what you can to accommodate your customers’ needs. Studies show that of the 60 percent of online shoppers that make at least one return or exchange per year, 95 percent will make another purchase if the return experience is positive.

Be Smart About Your Pricing

According to ReturnMagic, 80 percent of shoppers expect free returns. However, our State of Shipping survey found that only 17 percent of companies offer free return shipping. And, customers who received free shipping on returns increased their purchases over the next two years by 58 to 357 percent.

While free returns may not be in the cards for everyone, slower shipping services can at least help keep your costs low. You can continue to offer expedited shipping services on the outbound delivery, since that’s what consumers have come to expect. But, don’t pay top dollar for speedy return shipping unless the item is perishable or urgent.

An affordable option for lightweight, smaller return packages is USPS First Class Package Service, which accepts parcels up to 13 ounces.

Shippo now allows retailers to purchase return labels for packages where the outbound label is generated outside of Shippo. What that means is, even if you generate an outbound label using, say, your eBay shipping account, you can still create a return label through Shippo.

This also allows you to use a different shipping service level, like USPS First Class Package Service, on the return trip. And, for all Shippo return labels, you get the option to choose your shipping service, in case you want a different shipping service than what was used on the outbound delivery. This is a great option if you are flexible on the timing for getting returned packages back, and are looking to save on costs. As always, Shippo return labels are scan-based, so you won’t pay anything until the package is scanned on the return trip.

If you liked this post, you might also like our tips for offering a positive post-purchase experience.

Shippo is a multi-carrier API and web app that helps retailers, marketplaces and platforms connect to a global network of carriers. Businesses use Shippo to get real-time rates, print labels, automate international paperwork, track packages and facilitate returns. Shippo provides the tools to help businesses succeed through shipping.

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Linda Yuan
was Business Development Manager at Shippo

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