How to Handle and Reduce Ecommerce Returns

Frustrating as it can be for retailers, ecommerce returns are a fact of online life. Learning how to deal with them can be tricky because you have to find a balance between reducing them as much as possible and keeping your customers happy.

If you’re looking for a few guidelines on how best to approach the problem, you’re in the right place. This guide takes a look at the reasons why people return items bought from ecommerce stores.

Why do ecommerce returns happen?

If you want to minimize returns, you need to get a grip on why they happen. Understanding the root causes is essential to devising effective strategies to mitigate them. Granted, some returns are a natural part of the online shopping experience – it’s just inevitable when customers are buying sight unseen.

Here are some of the common reasons for ecommerce returns:

• Mismatched expectations: If the product received doesn’t match the customer’s expectations, they may decide to send it back.
• Bad fit: For clothes and shoes, size discrepancies are a major concern. Since there’s no way of trying on items before purchase, it’s not unusual to find that the product doesn’t fit as expected.
• Damaged products: Despite all your best efforts to package goods safely and implement high-quality delivery management, breakages do happen in transit. Some products may also be defective due to a manufacturing fault.
• Buyer’s remorse: Some ecommerce returns are less about the product and more about the consumer having second thoughts. This can be down to impulse buying, financial concerns, or simply a change of heart.
• Multiple purchases: In some cases, customers deliberately buy several versions of a product with the full intention of returning ones they don’t want to keep. This is pretty common with clothing purchases, for example.
• Gift returns: It’s the thought that counts, of course. But sometimes gifts are not ideal for their recipients, who would rather have the refund.

Some of these factors are under your control to a certain extent, and others aren’t. It’s crucial to tackle the issue any way you can though. That’s because the costs of ecommerce returns can hit your bottom line hard.

The cost of ecommerce returns to businesses

Ecommerce returns are more than just a logistical challenge; they also have a tangible impact on profitability.

The most immediate cost associated with returns is the refund to the customer. Note that this doesn’t just mean a loss of revenue for that particular sale. There’s also the impact of the lost opportunity cost of selling the item to a different customer.

But that’s not all. Once a product is returned, it doesn’t just automatically go back on the shelf. Your team has to devote time to inspecting it to see whether it can be resold and then repackaging and processing it if so.

The trouble is, ecommerce customers have come to expect generous return policies as a standard part of the customer experience. So, most businesses offer free returns as a part of their customer service strategy. While this is great for customers, it does mean the business bears the cost of return shipping on top of the initial delivery cost outlay.

This can be particularly difficult to handle for smaller operators. Boutique ecommerce operators or sole traders don’t have the trading volumes of larger businesses that can swallow up the costs more easily.

Many small business owners or one-person businesses may turn to accounting for self employed softwares to help manage the risks associated with returns by incorporating them into cash flow forecasts.

But financial management can only take you so far; what’s often not appreciated is just how high ecommerce return rates are. For instance, around one in ten of all apparel items sold online are returned.

With this in mind, how exactly should you handle ecommerce returns?

How to handle ecommerce returns

There’s no single approach that works best. But there are a few good practices that will stand your business in good stead.

Create a clear and easy-to-follow return policy

Transparency is key. It’s vital to outline clearly which products customers can return and under what conditions. You should set a time limit; 30 days from purchase is typical and will help you plan. Avoid using jargon or complex language.

Feel free to write a long and detailed returns policy, but don’t expect customers to read the whole thing. Make sure to highlight important points such as the timeframe and whether any specific types of products are excluded. There should be a summary section that’s accessible, too; feature it in a prominent position on your site so nobody has to hunt for it.

You should have every conceivable situation covered. Set guidelines for scenarios such as damaged items, defective products, and size exchanges. Doing this will save both you and your customers time.

Provide clear instructions for customer returns

Equip customers with a clear, step-by-step guide on how to initiate and complete a return. This might include details such as how to package the product, filling out forms, and how to print return labels. If you can, it’s even a good idea to include return shipping labels with the original package.

Consider creating a dedicated returns portal on your website where customers can get started with the returns procedure. It should be possible to track the status of a return and access any necessary resources easily.

Process returns quickly and efficiently

If you have the capacity, devote an entire team to the task. Ideally, you should train them specifically to handle returns. For smaller businesses, this might simply mean two or three individuals.

Don’t forget that technology can help. You can use dedicated return management software to minimize delays.

It’s not the only option, though. Many other cloud-based tools have features that can help you fine-tune your returns process. For example, you can take advantage of the automated accounts payable feature of accounting software for small business to process refunds fast.

You can also integrate return processes into your existing ecommerce or CRM platform to track and manage returns seamlessly. These platforms should also help you collect data so that you can identify trends and spot any potential issues that are leading to a higher rate of returns.

Communicate with customers throughout the process

It’s crucial that you keep in contact with your customers from beginning to end. As soon as a customer initiates a return, send them an acknowledgment email or notification to let them know their request is being processed. Keep the customer informed about the status of their return at every stage, from receipt of the returned product to the processing of their refund or exchange.

At this point, encourage customers to give you feedback on why they returned the item. Gathering this information will help you minimize future returns and improve your product offerings. In other words, don’t forget that this is an opportunity to impress and build customer trust.

How to reduce ecommerce returns

Focusing on the factors you can control is paramount. You’ll never be able to stop customers from ordering five pairs of shoes so they can find the ones that fit the best and send the rest back. But here are a few things you can do:

Include detailed product descriptions and high-quality images

You can reduce the risk of goods not meeting customer expectations if you do everything you possibly can to manage those expectations. This includes publishing high-quality product images and descriptions on your website. Take several photos from different angles and give a full description of the product that incorporates every possible detail.

Provide size charts and fitting tools to help customers

If you sell clothing or shoes, accurate size charts are a must. Include all measurements rather than relying on traditional sizes, particularly for womenswear (where the old methods of sizing are notoriously inconsistent).

Have an explainer section on your site giving a step-by-step guide to taking measurements. This way, you’re giving objective information, and nobody has to guess. And, of course, if you ship internationally, your overseas customers might use a different traditional sizing system altogether.

Use customer reviews to improve product descriptions and images

User-generated content can be a huge asset to ecommerce stores. Put customer reviews next to your product descriptions. They’re a big help to other potential customers because they channel the real customer experience of using the product.

Train customer service staff for prompt and efficient response

Training your staff to handle returns shouldn’t be an afterthought. Just because a customer returns one item doesn’t mean they’re lost to your business. Over the long term, their customer lifetime value may be very high, and sustaining brand loyalty is crucial. Turn the returns process into an opportunity to showcase your efficiency and professionalism.

Reward customers for their loyalty with discounts or other benefits

This is good general advice anyway. In the highly competitive ecommerce market, customers will expect you to reward their loyalty. Put a discount program in place that encourages repeat business. You could even consider introducing a loyalty points scheme that offers special deals and priority access to sales.

Final thoughts

Ecommerce returns will always be with us. It’s simply not possible to eliminate them completely. But what you can do is run your business in a way that minimizes the resulting costs.

With a little planning, you can implement a policy that not only reduces the total volume of returns but turns every return into an opportunity to demonstrate superb customer service.