Best Practices to Manage e-Commerce Returns in Businesses

Best Practices to Manage e-Commerce Returns

Jennie Wilson
Jennie Wilson
November 9, 2022
Last updated on:

November 9, 2022


Read time: 4 mins

The exponential growth in demand requires businesses to ensure they maximize their gains and minimize their returns. Salesforce Research states that 38 percent of consumers won't return to physical stores until a vaccine is found. If firms want to accommodate this customer base, they need to improve their e-commerce returns management process.

Let's examine how much these returns affect the business.

The Cost of e-Commerce Returns

Here's how your e-commerce returns process impacts your business: -

  • Refund Costs – E-commerce businesses lose revenue and clients due to refunds.
  • Initial Shipping Costs – Online businesses pay for the shipping cost to build a long-term relationship with their buyers. Getting a return request on these products means a permanent loss in these costs.
  • Product Disposition Costs – Reselling some products may not be a feasible option. Businesses can either liquidate these products or dispose of them completely. While liquidation recovers some amount, a complete disposition is a total loss.
  • Return Delivery Costs – If you offer free return delivery, your operational costs will shoot up significantly. By 2020, Statista estimates a $550 billion return delivery cost in the U.S. alone.

7 Best Practices to Manage e-Commerce Returns

1. Improve Information Provided on the Site

22% of customers sent products back because they looked different from the site photos.

Customers buy their stuff online by relying on your photos and descriptions. Hence, having great photos and detailed descriptions diminishes returns significantly. Your images should be clear, high-grade, thorough, and provide a different angled view of the product. We recommend you click at least four photos of each product from the front, back, and other sides.

Your description should contain every detail your customers will need to understand your product well. We suggest you include at least the size, weight, and product material in your descriptions to guide your users. Using Amazon or eBay guidelines to change your photos and descriptions is also a great technique to lessen your returns. You could also provide short product videos to give a 360-degree view of the product.

Related Reading: How to Write Engaging eCommerce Product Descriptions

2. Adopting a Liberal Returns Policy

95% of customers will buy again from the sites that ease returns policies.

A customer-centric return policy empowers your potential buyer to buy your product with absolute confidence. Having a liberal returns policy may seem counterintuitive, but it has satisfying long-term benefits. By assuring your customers that returns with you will be easier, you build a lasting bond with them that boosts sales. Studies show that having a longer return duration (45 to 90 days) works well to reduce returns due to the endowment effect. During this long return period, your customer may either form an attachment to your product or forget about returning it all together. Either way, you reduce your returns without hurting your sales.

3. Encourage Customer Ratings and Reviews

88% of customers view images and videos other customers place in the review section before purchasing.

Honest user reviews and ratings effectively reduce returns for the e-commerce site. Customers rely on social proof of the product's functioning to form an opinion and buy it. You double your chances of purchasing if you have good ratings on your products. Hence, encourage your buyers to rate and review the product by incentivizing them through discounts. Also, you’ll notice a drastic difference in the return of high-rated products as compared to the low-rated ones. If you notice a product having more negative reviews than positive ones, consider assessing its quality.

4. Use Proper Size Guides

8 out of 10 returns in fashion is related to size issues.

Product sizes puzzle most e-commerce buyers. The inability to see and feel the product in real-time impedes the buyers from making an informed decision. They rely heavily on the size charts provided by the site. Hence, e-commerce sites need to put this information on each product's page to help the customers pick the right size. Placing the size while your buyer looks at his/her cart is critical to diminish returns dramatically. You can include the size chart by adding various size chart extensions available in the market.

5. Shut Down Serial Returners

The retail industry lost 7 billion pounds due to serial returners.

If you find buyers who are consistently returning most of their purchase, you might want to penalize them. You can easily find these customers by going through your customer and inventory data. You can begin by slightly restricting their returning abilities and tightening the noose on repeated misbehavior. Banning these shoppers establishes healthy boundaries that protect your losses and encourage responsible purchasing. Products like Return Magic help you customize your return policy for every customer category.

6. Ask your Customer the Reason for Return

The best way to reduce the return rate is to take input directly from the consumers. Honest feedback exposes the cracks within your product or business that need immediate fixing. Ask buyers to select or provide a reason for their return request at the time of filing them. You could also give them space to elaborate on the issue they had with the product. Then, collate these results and notice common reasons to improve your operations or rectify the site appropriately.

7. Get the Order Right the First Time

23% of people cite receiving the wrong item as their reason for return.

Sending the wrong item is a huge return issue for many customers. Enhancing your order processing is a great way to diminish returns due to this reason. Encourage your inventory workers to move away from spreadsheets and post-it notes by using simple solutions that perform all packaging functions. You can deliver improved customer service with very little investment and reduce your returns by avoiding such mistakes. To solve this issue in a modern fashion, you can outsource eCommerce order fulfillment services from a third-party service provider.

Final Thoughts

Return requests directly impact an e-commerce business's revenue. So, ensure you deal with them effectively by considering the user experience paramount. Use our tips to improve your fulfillment center's capabilities and reduce returns. Outsourcing to an eCommerce services provider like Invensis helps you to manage your returns to increase customer satisfaction.

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