Did you know that eCommerce products' return rate is around 30%? That's almost 4 times higher compared to the brick-and-mortar store. Handling large volumes of returns can be tedious, so it's vital to have an excellent eCommerce returns management system in place. It saves time and improves the return experience.
Having the right eCommerce software helps take away the pain of the return process. But if you want to improve the efficiency of your returns management further, these hacks are proven helpful. We also include best practices and examples to give you a clear picture of how it should work.
By the end of this read, you will learn how to simplify your returns process and improve communication in your business. Implement it properly, and it will reduce the return rates, which soon positively impact your top and bottom line. Let's begin.
There are many reasons why a customer returns a purchased item, and 4 of the common causes are:
The customer orders an item by mistake
Merchant's fault for shipping the wrong item or size
Damage-related issues caused by accidents during shipment
The product doesn't match the appearance or functionality advertised on the website
The last one hits hard for many consumers because they never have the opportunity to see the product in person until it arrives. It's one of the most significant disadvantages of online shopping. Ultimately, they always have to take risks and only hope that online retailers are trustworthy.
One thing you can do to strengthen their confidence in your business is to provide them with a safety net. Let's discuss this more below.
Customer satisfaction and retention are the primary goals of eCommerce businesses. Having an efficient processing of returns can help you reach these goals. Here are a few proven hacks that you can try.
Convenience, ease of use, and accessibility are essential, but they are only secondary reasons why people prefer to shop in your eCommerce store. Being open and honest remains to be their number one priority. As proof, 94% of consumers are more likely to stay loyal and spend more on a transparent business.
You can inject customer service into every phase of your returns management process to bring more transparency. It helps consumers to know the latest progress of their returns. The standard returns process looks like this:
In an in-store setting, the verification stage is often the first step. The store personnel will verify if the product is indeed purchased from their store and check its condition. Unfortunately, eCommerce stores don't have that capacity.
Most eCommerce store owners include additional conditions on their return policy. It simply describes all the reasons the company finds acceptable to allow a consumer to return a purchased item. An excellent example to cite is 3 wishes, a lingerie and apparel store. It clearly states what the customers must check before submitting a return request. Here's the screenshot to see the complete list.
The eCommerce brand also includes a special condition on its return policy for its Halloween costumes and accessories that you can use when offering seasonal items. It clearly states the timeframe they allow returns and what the consumers can receive once their request is granted.
The return policy is usually included in the fine print. But because of their small font, customers can miss them easily. It's advisable to add special conditions on your customer support platform too.
The next step is the actual creation of the return request ticket. Make it simple and accessible to prevent confusion. Amazon sets an excellent example because the option for return is also available on their Order page. Click the button and you will go to the next page, where they ask the customers the reasons for returns.
Another good point of this return request form is it allows customers to leave a comment. It's a known fact that a customer is returning an item for a wide range of reasons. Some are predictable, while others are based on consumer expectations and emotions.
Most eCommerce merchants only provide general reasons. And that's why the comment section becomes handy. It will allow your customers to give unique reasons why they want to return the product. If you can't provide this option, you can give them quick access to the customer service team for assistance. Your team can walk them through the process and provide other options.
Once the request form is submitted, notify the customers that you received the request. You can send this through email or SMS.
The stage where your team can verify if the returned item meets the conditions your company has provided. Regardless of the decision, communicate it well with the customer.
Email is the best form of communication because it accepts different content formats. Infographics, posters, or PDFs are ideal formats because they present the information in a digestible and appealing way.
Upon approval of the return request, a customer support agent will contact the customer to schedule the return order pickup. Not all delivery carriers are available in every location. Therefore, offer multiple delivery carriers so customers can choose the most convenient.
Most delivery carriers provide a tracking page. You should also provide one on your Returns Portal, including the status description. It keeps your customer up-to-date without bombarding them with tons of notifications.
Once the item arrives at the warehouse, you can start the refund process. Not all eCommerce retailers offer a refund policy. If so, you can offer an alternative, such as an exchange discount and store credits. If the return is your (retailer) fault, you can offer a bonus credit as a gesture of apology. It helps convert dissatisfied customers into happier customers.
Some eCommerce businesses provide all these options, and Green Supply is one of them. If their customers are unhappy with their recent purchase of wholesale KN95 face masks, they can submit a request, and a customer service agent will contact them to process everything.
Big or small, eCommerce businesses should have a clear return policy as it solidifies customer loyalty. It gives consumers confidence and security that they can return the goods hassle-free when issues arise.
A return policy is an agreement between customers and merchants. It outlines the merchant's requirements and process for accepting return orders. There's no standard format for it. You can create a simple return policy like Suburban K9, an in-home puppy training and boot camp.
It's short and on-point, which makes it easier for everyone to understand. It also contains the important details that matter to the company.
Product condition requirements
Contact details of the customer support team
And who will shoulder all return costs (including the shipping cost)
The return cost often covers restocking and processing costs. Since Suburban K9 didn't mention a specific amount, it's safe to assume customers only need to pay for shipping. You can use this shipping calculator to estimate how much the customers need to spend from their location to your store/warehouse location.
If the item to return is a physical product, write a comprehensive return policy. Let's take a medical emergency response device, for example. On top of the details I've listed above, you can also list all accessories in the original box that must be returned. Speakerphone, medical alert console, and power cords, to name a few.
Some medical care alert providers offer additional subscription services. If they purchased that, too, it's worth specifying when you will cancel the service. Will you cancel it as soon as the customer ships the equipment back or upon arrival at the return center?
Can you return smaller items, like greeting cards, for example? The answer is yes. No matter the size of the products, they are all qualified for returns. You may include a specific condition where personalized greeting cards are not eligible for return or exchange.
A general rule of thumb is to place it somewhere prominent and accessible. That's why the home, checkout, and product pages are the usual location where customers can find them. You can also take Shop Solar Kits' approach, solar equipment sale and installation support. They showcase their return policy on 4 different web pages and the footer.
Are return policies legally required? This is one question most new merchants ask. The answer will depend on the country you're serving. Some require them by law, while others pass them on to the merchants' preferences. However, some countries provide a specific condition when the merchant decides not to provide one.
Let's focus on the USA. No federal laws require merchants to provide a return and refund policy. However, they give some exemptions for the following situations:
The merchant breaches the sale contract
During the cooling-off period, customers can cancel a purchased item with a price range of $25 or more 3 days after the purchase date.
Other rules and exemptions vary from state to state. There are 38 states that released a statement: "There's no right to cancel contracts or purchase agreements. Whether you can receive a refund is dependent on the retailer's return and refund policies." While the remaining states provide unique conditions.
Let's take Neota as an example of a business that doesn't offer a return policy. It's a company based in New York, USA that provides a software development platform. According to the state of New York, an eCommerce business is legally required to share its refund policy with the public. If they fail to do so, their law will require the business to accept returns within 30 days of purchase.
Countries protect consumers differently. Search for the Consumer Protection laws so you can comply accordingly. In the USA, the consumer protection law includes detailed information on the following:
Warranties and service contracts
Fair credit reporting act (secure collection of credit card information)
Federal trade act section 5 (consumers be treated fairly and not deceived)
Returning an order is now a growing trend. Therefore, businesses (online and offline) should make the returns process seamless to minimize losses. Reverse logistics is one excellent solution to use. As the name describes, it's the process of moving the returned item from the customer to the merchant's store or fulfillment center.
Processing returns vary on the nature of the business. In the hotel industry, reverse logistics is useful for procurement services. It can deliver linens, furniture, and other equipment that will impress the guests, and they will all find them as the best luxury hotel.
You can handle reverse logistics internally. But you can outsource a provider if you don't have enough workforce.
Reverse logistics isn't limited to returning online purchases. It's also versatile in collecting products for:
Recycling and disposal
Or reach its end of service life
No matter what purpose you want to offer, reverse logistics is a great solution to maximize your profits while saving the environment. That's right, reverse logistics providers take environmental sustainability seriously. They ensure following the correct disposal procedure for products like electronic devices.
Take a trusted ingredient and chemical supplier for food and pharmaceuticals as an example. Aside from moving packaging materials, reverse logistics will be responsible for the proper shipment of expired products, product recalls, clinical trials, and counterfeits.
Managing high monthly return volume manually can be complicated and frustrating. Automated returns can simplify the entire returns process as it will do all the heavy lifting. One of its solutions is to provide constant and clear communication with the customers.
A poor experience can create huge friction that can lead to customer dissatisfaction. Before your business receives a negative customer satisfaction score, you can create a better customer experience.
You can program each step of the process with an appropriate return window to immediately address the customers' concerns. Remember to include the return status and its description. It helps customers understand the entire process.
If you offer a refund policy, you can also use automation to provide an instant refund. After receiving the approval, the system will automatically credit the amount to the customer's account (payment provider). It improves the returns experience and gives your business a trustworthy impression from your customers.
Most automation tools come with a wide range of automation rules. So, ease your mind, you can get the result you want. You can even create your own using custom rules.
Customers couldn't return a digital service or product. So having a return management or policy is not applicable. Companies can instead offer a replacement or refund policy. Since there are different types of services, specify which services are refundable and non-refundable.
Take an eCommerce digital marketing agency as an example. The agency can offer a partial or full refund for each service. But when it comes to consultancy and training, it's acceptable to specify them as non-refundable.
Of course, customers may not take it as good news. What they can do to prevent friction is give them an option of cancellation. They can provide a statement on the refund policy, like "Client may cancel with a notice written 2 weeks in advance."
How about an online application? Once the customers purchase the app, they will have ownership forever. If you sell the applications to online marketplaces, their refund policy covers the application. For example, you sell an app on Google Play Store. Customers who want a refund can directly go to Google's support page and submit a request. Google support will also be responsible for updating the status of the refund process.
If you sell it independently, you can write your own refund policy yourself, stating the terms and conditions. Some software development companies offer a refund, but it's optional. However, there's a UK law that the company is liable if the application is infected with a computer virus. Provide a refund or replacement while you level up your security game. Check the law in the countries you serve to ensure you comply.
Processing return orders is a crucial part of the business. Ensure you have the right tools and sufficient workforce to efficiently handle the eCommerce return management process. Implementing a reasonable return and refund policy is a good start. Match it with utmost transparency to solidify your customer retention rate increase.
Free return shipping is an excellent offer for your loyal customers. No customers would want to spend more on a product they haven't used yet. Though it's a great offer, it's optional. If it creates financial hardships in your business, you can choose not to provide it. Just ensure to specify this in your return policy for your customers to be aware of.
eCommerce businesses aim to provide a platform where customers can shop without restrictions. You can make it happen by following these proven hacks. Visit our website to learn more about how you can reduce the cost of shipping without sacrificing service quality.
Burkhard Berger is the founder of Novum™. He helps innovative B2B companies implement revenue-driven SEO strategies to scale their organic traffic to 1,000,000+ visitors per month. Curious about what your true traffic potential is?