Top 9 Ways to Limit E-Commerce Returns
With the post-holiday returns rush slowing down, merchants are now officially closing the book on 2021’s peak season and moving forward full-force into 2022. But while the holiday rush undoubtedly sees its own unique uptick, e-commerce returns are a year-long reality for e-commerce businesses.
As e-commerce sales grow, so do returns – in fact, according to a survey conducted by the National Retail Federation and Appriss Retail, the percentage of merchandise retailers expected to be returned in 2021 was about 16.6%, up from 10.6% in 2020. The average rate of returns for purchases made online, however, was roughly 20.8%.
To break down the numbers further, 2021 saw approximately 23% of the $4.583 trillion in total retail sales accounted for by e-commerce businesses. That’s about $1.050 trillion dollars in online sales. With 20.8% of those online sales ending with returns, e-commerce businesses as a whole are processing over $290 billion worth of returns.
It should be noted, however, that returns don’t have to be bad for business. In fact, in some instances, they can become a revenue driver.
But if return shipping is in fact costing your business, there are some steps you can take to reduce e-commerce returns.
Why Do Consumers Initiate Returns?
To get ahead of e-commerce returns, it’s important to first understand why customers return these purchases in the first place. There are multiple reasons why, but a few of the top reported instances for why consumers returned a purchase are:
- 20% due to damaged product
- 23% due to receiving a wrong item
- 22% due to the product looking different than expected.
- 35% due to other reasons.
The rate of returns also affects different businesses in different ways. For example, online stores that sell apparel or footwear are more susceptible to encountering returns than online retailers that sell beauty products.
The steps described below can help you limit returns, with some steps addressing multiple issues for why e-commerce customers make returns:
Invest In High-Quality Product Photos And Videos
While this may seem obvious, the best way to combat returns is by giving customers the best visuals possible before they make a purchase.
Be sure your photos of the product are taken from different angles, and if possible, provide a 360-degree view to literally offer the full picture.
On top of that, it’s helpful to include a zoom feature for your product images. Customers are going to carefully inspect your products up close when they receive them so it’s best to give them the ability to inspect the details upfront.
Another tactic you might try is to incorporate Instagram photos into your product pages, allowing your customer to get an authentic look of your product. Videos can also give customers a better expectation of what your product is like in action, helping boost sales (73% of U.S. adults are more likely to make a purchase after watching a demo or video that explains the product/service) and mitigate against potential returns.
Provide a Detailed and Accurate Product Description
Along with superior imagery and video for your products, including a detailed and accurate description on your product pages can also help limit returns.
Creating a headline that hooks your potential customers to the product page is one thing, but within the product description, be sure to address any customer concerns right away and to outline the solution to the problem your product solves. For example, you’ll want to add information about the size or weight of the product so that customers know what to expect. This is especially important for apparel and footwear brands.
According to a 2021 Power Reviews survey, clothing (88%) and shoes (44%) were the top two most common items returned among respondents. Including sizing charts is one way retailers are combating returns based solely on wrong sizes.
Customer Reviews Can Affect Your Return-Rate
As many consumers will tell you, reviews are one of the most powerful tools when it comes to generating sales. Having real people speak honestly about your product can help give prospective customers the confidence to click that buy now button.
And that reassurance can actually last long after checkout.
When surveyed, two out of three shoppers said they would be less likely to return a product if they had access to customer reviews along with images, video, or a Q&A section. This is because oftentimes, customers will include information on the initial hesitations they might have felt before purchasing, and then detail how those worries were eliminated after receiving the product.
Incorporating a way to allow potential buyers to filter through reviews for keywords or specific concerns can help them better understand what your products look and feel like, and how others are utilizing them.
Customer reviews can also act as a way to incorporate more images of your products in more candid ways, giving the customer an even clearer – and unbiased – idea of what to expect.
Be Generous with Your Return Policy
While this may seem counterintuitive on the surface, there is actually good reason for implementing a more flexible return policy.
You should consider that customers often wait until the last minute to make returns, and an extended return window creates less urgency for customers to make returns. This gives them more time to think about whether they want to hold onto an item rather than hastily sending it back. While they ponder which choice to make, some customers can grow attached to it and be more willing to keep it. This process of growing more attached to a product the longer a customer keeps it is known as the endowment effect.
A well-crafted return policy can also lead to more sales, since customers feel safer making the purchases to begin with.
Survey Customers To Learn Why They Initiate Returns
While quantitative data can help inform your decisions on how to combat returns, nothing quite compares to hearing ‘Why’ from your customers themselves.
There are multiple ways to ask your customers for direct feedback in order to learn why they’re returning an item. One of the most popular and effective ways to get answers is by creating a short form your customers can fill out when initiating the return process. Once a pre-generated return label is scanned, send your customer an email that includes a questionnaire. If you don’t include pre-generated return labels, your customers can fill out the questionnaire on your website when they initiate their return.
The trick is to make this process as easy as possible. Include multiple-choice questions so customers simply choose the answer best pertaining to their circumstance. The more manual the process, the more likely you run the risk of a customer being dissatisfied with the return process.
Perfect Your Packaging To Avoid Delivering Damaged Goods
As mentioned above, 20% of returns are initiated because of damaged products, which means you’ll want to make sure that you work with a trusted carrier who will take care while getting your shipment from Point A to Point B. And more importantly, you’ll want to perfect your packaging.
You’ll want to first choose the type of package to protect your product. While polymailers may be a lower cost choice, you should consider the fragility of your product. Investing in boxes that fit your product better may be a safer option.
Once you’ve chosen the right box, you’ll want to choose the right in-fill. There are pros and cons to each infill option. For example, air pillows are inexpensive and non-abrasive, but also won’t work as well for heavy or irregularly shaped objects.
Choosing the right infill option will help you avoid damage to your products no matter which carrier you’re using.
Identify Serial Returners
One risk that comes with creating a generous return policy is the risk of incurring serial returners.
Serial returners might buy a luxury product – such as a designer dress – use it once, and then return it because they actually can’t afford the product. They might also buy multiple items to try them out with the intention of only keeping one, a practice known as “bracketing”.
In order to segment these customers, you’ll need to access more advanced metrics pertaining to your business’ returns. One way to do that is to tag your customers for each purpose and let your CS team keep track of that tag number so that they can spot which of those tags is processing an inordinate amount of returns.
Once those customers are identified, you can ensure they don’t get the same offers as other customers. This can mean you exclude them from offers like free shipping or full refunds on returns.
This may help deter those customers from ordering your products just to turn around and return them. However, you should keep in mind that this method can take some serious time out of your day, and will have to be done carefully so that you do not blacklist the wrong customers.
Send The Correct Items the First Time Around
Let’s harken back to that 23% of customers who return products because they received the wrong one. This could happen to your e-commerce business for multiple reasons, including:
- Errors from your internal staff members
- Mistakes made at your partnered fulfillment center
- Miscue made by the carrier during shipping.
As your e-commerce business grows, the need for additional fulfillment support will grow, too. Making sure your internal team is well trained, that you partner with the right 3PL, and that you ship with trusted carriers can be the difference between getting it right the first time or sending the wrong items.
Promote Exchanges Instead of Returns
One way to limit returns is to convert those returns into exchanges instead. One consumer report found that 57% of shoppers replace the items they return. However, only 41% replace the item with another one from the same retailer. A different survey found that around 92% of customers would buy a product from an e-commerce site again if they had a smooth return process.
If you can deliver a simple and seamless e-commerce returns experience, consumers will want to shop with you again, and more than half the time shoppers are trying to replace items rather than just receive a refund.
Offering the option to exchange at the beginning of the returns process could allow you to offset any cost of the original return, while also keeping the customer satisfied. Some brands will take it a step further by offering a discount to exchange the item rather than just offer a refund for the return. This could be a great way to incentivize exchanges if your e-commerce business is in the position to take on such a strategy.
How Shippo Helps With Shipping E-commerce Returns
Even after taking all these steps, your e-commerce business will undoubtedly still encounter returns. Managing your return rate is a normal part of business, and when approached thoughtfully, can actually win you more loyal customers as well as sales.
Bottom line: when it comes to returns shipping, the easier you make the process for your customers, the more they will want to shop with you again. Luckily, Shippo is here to help.
With Shippo, you’ll have the ability to print return labels at the same time as shipping labels at no extra cost. You can include these labels in your packages and only pay when the return label is scanned by a carrier. This helps make the returns process easier for your customers, who will then have greater confidence in your business when shopping again.