Ecommerce’s importance continues to grow year after year. An increasing number of people are heading to the internet for their shopping needs, which in turn has encouraged a boom in entrepreneurs launching online stores.
If you’re considering starting your own ecommerce business, it’s crucial to remember that when consumers make online purchases, they generally expect to be able to return products that don’t meet their needs or aren’t up to their standards. This empowers them to buy online with a high degree of confidence.
After all, making a buying decision based on an online image comes with some degree of uncertainty. Fortunately, this concern can be lessened by the ability to return the product.
According to Invesp, the return rate for products ordered from online stores is at least 30%. In contrast, the return rate is only approximately 8.89% for items purchased from brick-and-mortar-stores.
While the average return rate in ecommerce does vary depending on the type of products being sold, ecommerce returns management will be an essential function in your operations.
The importance of managing ecommerce returns
To achieve success in online sales, it’s essential that your website has a variety of functions for electronic commerce. You want to be able to attract customers to your site and encourage them to make purchases.
However, it’s only natural that some of those purchases will unfortunately end up being returned to you. For this reason, your website also needs to be able to easily manage returns.
If your ecommerce business doesn’t currently have a clear and detailed return policy, now’s the time to develop one.
Customers sometimes buy a variety of items with the specific intent of returning at least one of them. This indicates that returns can be initiated because of a customer’s shopping strategy in addition to a level of dissatisfaction with the product’s quality, features, or other factors.
Today’s consumers have specific and high expectations related to an online business’s return policy for digital commerce and ecommerce alike. For example, many customers expect to be able to return an item for any reason and without incurring any related return or shipping fees.
When customers have a favorable return experience, they’re far more likely to choose to do business with your company in the future.
A clear return policy may elevate a consumer’s level of trust with an ecommerce business, and this directly impacts a consumer’s buying decision.
In fact, according to Investp, 92% of consumers will re-purchase from a store if the returns process is easy. What’s more, 79% of customers want online stores to offer free returns.
A return policy can clearly drive sales. However, processing an excessive number of returns without collecting any fees from customers can create a serious financial drain on a business.
The solution is to develop a return policy that’s attractive to customers and designed with your business’s growth and bottom line in mind.
Tips on how to handle returns for your online store
Your online store’s policy on returns should actually be a full strategy. This strategy will include establishing and conveying policies, ensuring customer satisfaction, and even taking strides to reduce your store’s return rate going forward.
This is a tall order to fill, but these tips will get you well on your way to improving all aspects of your returns process!
1. Create a clear, flexible return policy
Your store’s return policy will ideally be clearly stated on its own page. Customers should be able to skim through your policy quickly to determine if it’s acceptable to them.
Include factors related to deadlines, the condition of the items being returned, restocking fees, and return shipping fees. If you’re not including a return shipping label in each package, provide a link to access the shipping label or instructions for how to obtain it.
Are you unsure about the strength and fairness of your return policy? Visit the websites of some of your top competitors.
Pay attention to what the policy terms are, how the policies are presented, and how visible the links are to reach the return policy’s terms. For good measure, read reviews to learn more about customers’ actual experiences returning items with these policies in place.
2. Make the policy easy to find on your website
When online shoppers are preparing to make a purchase with a store with whom they’re not familiar, they often look for the return policy. This is also frequently true for when they’re buying products that they’re not completely certain will meet their needs.
This policy should be very easy for them to locate. For example, it should be outlined on your FAQ page. You also should have a clear link to the full return policy in your footer or sidebar.
When shoppers have to hunt for your policy, they’ll quickly lose trust in your store. Some may make the effort to contact you via online chat, email, or phone. However, many will simply look for a comparable product on another website that has a clear return policy.
3. Understand local and federal laws governing returns
Laws related to processing returns vary by location. In the US, for instance, federal law states that all stores must accept returned merchandise that’s defective.
In addition, if the item costs more than $25, customers must have at least 3 days to return a product for any reason. Ensure that your store’s published policy complies with all laws in the areas where you ship your products.
4. Include pre-printed return labels in shipments
The return process should be as easy as possible for your customers. Any perceived hassle or inconvenience may deter them from making another purchase through your ecommerce store in the future. Providing a pre-printed return label is a much-appreciated convenience for shoppers.
The best policy is to include a pre-printed return shipping label with the package. If the customer decides that the goods are not suitable, they can easily repackage the items and stick the return label on the box or mailer.
The other option is for the customer to access the return label through their order history page on the website. Because this option requires the customer to have a printer, box tape, and other supplies, it’s far less convenient.
5. Supply free return shipping
Free return shipping is usually the best policy for ecommerce businesses. Customers expect stores to process their returns without incurring any expenses. However, you may need to alter your policy slightly if return shipping fees are creating financial hardship for your business.
For example, you might offer free return shipping if the order is over a specific dollar amount. You could also encourage in-person returns if your ecommerce store has a physical counterpart that’s located close to many of your customers.
6. Provide a fair time limit for returns
Of course, you must consider the impact of returns on your business’s bottom line. With some ecommerce stores routinely seeing a 20% to 30% return rate, allowing a lingering possibility for returns can make money management challenging.
At the same time, however, the policy needs to be fair to your customers. The shipment may arrive while the customer is out of town, ill, or otherwise too busy to give the merchandise their full attention.
Expecting customers to decide whether to keep the items within a few days of receiving the package is generally not reasonable. On the other hand, accepting returns 60 to 90 days out may be impractical from an operational standpoint.
Each industry is unique, so you should look at the time limit established in competitors’ policies. It’s usually best to aim for a time limit that falls somewhere between 15 and 30 days.
7. Offer a fast return process
When customers return items to a store, they often expect to have cash in hand or a transaction posted to their account when they walk out of the store.
Ecommerce returns are understandably different, but customers still expect their money to be returned to them as soon as possible.
One strategy is to initiate the refund once the return shipping label has been scanned by the carrier. If you need to inspect the merchandise for any reason before issuing the refund, ensure that this step is completed soon after you receive the package.
8. Automate the return process
As a matter of convenience, automate your return process as much as possible. For example, if customers must log in to your website to initiate returns, management of the full return process could occur from this one page.
This includes filling out a field to explain the reason for the return, accessing the shipping label, and even scheduling pickup service for the package.
Through this hassle-free process, the consumer’s steps to facilitate the return can be completed in minutes and without having to leave the house.
9. Check in with customers post-return
Returned products can seem like a defeat, but it’s actually just one page in your customer’s history with your business. Customers frequently return products online.
These returns often only negatively impact a customer’s desire to shop at the store again if the experience was unpleasant. With this in mind, it’s good practice to touch base with each customer after a return.
This should include some type of follow-up related to their experience. For example, you can ask the customer to fill out a short survey online. You can also offer suggestions for alternative products that may meet their needs.
10. Review your policy often, and update it as needed
Your store’s return policy directly affects customer satisfaction, your net income, and other crucial factors. Get in the habit of periodically reviewing the policy in comparison to recent metrics.
Updates to various aspects of your policy, the return process, or the visibility of the policy on your website may all occasionally require your attention.
11. Use returns for market research
If you have an online store and don’t currently collect stats on returns, you need to start doing so soon. These stats offer clear insights on all aspects of your returns process.
They also may identify issues with specific products, your packaging, and other essential details that could be corrected or adjusted.
For instance, through a pre-return survey, you can identify trends related to reasons for a return. If you notice that one particular product consistently doesn’t fit or live up to expectations, you may need to tweak the product description.
This data can open your eyes to many other factors, including faulty features, poor quality, and more.
You can also identify trends after the process is complete. This gives you a chance to monitor your store’s performance versus expectations.
You may need to revise your process internally or adjust expectations through changes to your published returns policy. Furthermore, you might discover that customers are finding better prices elsewhere, which reveals the need to adjust pricing strategy.
Final thoughts
Processing returns is an essential part of operating an ecommerce business.
Establishing a reasonable return policy and a streamlined process allows you to reduce the time and hassle associated with returns for you and your customers.
At the same time, it can help you to strengthen your relationship with your customers and even gather key insights to improve your operations.
If your store’s currently lacking a plan for managing returns, use the suggestions in this article to create a top-notch policy to help your business achieve new levels of success!
