No More Hassle: Smart Returns Management Solutions
Your merchandise is being returned in droves and you start thinking life throws you a curveball?
Rest assured. A large number of returns are a pressing issue facing every retailer. However, there is no average return rate for all online stores – returns can range from 5% to 50% depending on the type of the item purchased, product and price category, target audience, to name a few.
If you asked both consumers and retailers about what makes the best return policy, the takes on the issue would normally be flat-out contrary. From the buyer’s perspective that would rightfully mean the opportunity for an easy, hassle-free return of an item (even a lightly used one) for a full refund, with no return time frame set or receipts required. Meanwhile, you as a merchant would rather ramp up return restrictions or accept no returns at all, huh? One man’s meat, you know.
However well-thought-out a return policy may be, ecommerce returns are always uncomfortable for buyers and retailers alike. Storage and logistical problems, loss of time, inability to resell the item, additional processing and shipping costs associated with merchandise returns emerge as one big hassle for retailers when it comes to returns management. The same holds true for customers who have to lose their precious time and generally money to send the merchandise back to the seller.
Why is it mission-critical for every ecommerce store to have a well-designed return policy?
Hassles of returns suck, and after a while you may feel an urge to significantly tighten your return policies. However, you’d better not jump the gun. The point is that more and more consumers have higher expectations about returns nowadays and opt for online retailers offering generous open-ended return policies that imply less risk associated with the purchase, thereby setting new norms for online shopping. Hence, your strict rules won’t prolly do you a world of good, since you may run the risk of losing sales, inasmuch as:
- 95% of online customers will purchase again from a retailer that provides a good return or exchange experience;
- with free returns offered, consumers are twice as likely to spend more than $1,000 online (WalkerSands’ Study);
- free shipping and free returns are now even more important to consumers than fast shipping (Walker Sands’ 2015 Future of Retail Study).
Hot deals and irresistible bargains push people to buy stuff they actually do not need. Which means more returns. Whatever the reason may be, under such circumstances, you seem to have no other choice but to accommodate to the mounting tendency and turn your return policy into a competitive advantage for your brand.
Nonetheless, this in no way means you should encourage returns in any way you can. No.
Developing the right and efficient ecommerce return policy viewed by your shoppers as a value-added service is a silver bullet that can slash the number of returns drastically and help you gain customers’ continued patronage and loyalty.
That’s what we’re gonna delve into.
Key reasons for ecommerce merchandise returns
Prior to looking for the ways to reduce your return rate, it’s critical that you figure out the reasons why customers send their merchandise back. All returns can be roughly divided into two main groups:
- Client returns
- Post Office returns or Click & Collect returns
In the former case, the customer initiates a return of the item after purchasing it and opening the package. As for the latter, returns are made by a courier or a postal service, with the item not being purchased by the buyer.
So, what are the main reasons for ecommerce merchandise returns and how to avert them?
Reason 1. Getting the wrong size
Getting the incorrect size proves to be the most common reason for product returns. Hands down, buying online is almost always a kind of a crapshoot, as it implies no interaction with merchandise in person. And with clothing sizes ranging so much between retailers, you never know what you’re gonna end up with. That is what makes customers hesitant about a purchase and compels them to buy more than they intend to keep in order to test the items out and send back the ones that are not a perfect fit.
- Including accurate product dimensions info into a product description is key, and if you’ve already done that, going through your descriptions one more time won’t hurt.
- Don’t forget to indicate what size the model is wearing and give their measurements.
- Providing your customers with proper measurements and a sizing chart to go by and giving detailed instructions on how to correlate them to real-world dimensions is a sure-fire way to help shoppers pin down the correct size the first time.
- Online fitting tools that help customers select the right size based upon given measurements might be a good option as well. For example, the Virtusize app enables customers to upload product measurements and compare the size and fit of clothes they already own with similar garments they want to buy online through overlaying the silhouettes of both items. The app is used by the largest online retailers worldwide and has been proven to significantly lessen the likelihood of buying the wrong item – the fashion retailer Asos says the app helped them reduce fit-related returns by a whopping 50%.
Reason 2. The disparity between the description on the website and the actual product appearance
Returns related to this disparity are usually triggered by getting the wrong color or cut, a defective or poor quality item – just remember those funny expectations vs reality memes. Simply put, the product does not match up to the customer’s expectations. What is displayed in an online catalogue may be a far cry from what is actually delivered, which makes customers disappointed and returns inevitable.
- Crafting informative product descriptions and comprehensive product specs that communicate all possible details – material, color, dimensions, surface characteristics, additional elements, weight – looms large in preventing product misconception.
- Go an extra mile and add product videos or high-quality 3D images as well as special tools that allow zooming in on details and rotating the image 360 degrees so that customers can view an item from various angles.
- Letting your customers leave product reviews and feedback on your website proves to be a smart move. After all, nobody knows better than your past customers do that those trendy sneakers run small and you should order sneakers 1/2 size larger than you normally wear.
Reason 3. Wardrobing
Wardrobing, a specific type of consumer fraud, which implies the practice of purchasing things with the intention of wearing or using them only once before sending them back to the retailer, is something that you, as an online merchant, may even not be aware of.
Buying, say, a brand name suit only to wear it to a job interview and then return it for a full refund is common practice today.
Though there’s not really a whole lot you can do to completely eradicate fraudulent return, yet you may try and take some steps at least to curtail ecommerce wardrobing, thereby diminishing its impact on your business’s bottom line.
- Hanging stickers on electronics or attaching noticeable tags to clothes with a tagging gun instead of a safety pin seems to be the way out in case you outline in your return policy that you do not accept merchandise showing the evidence of use, such as broken seals, removed tags, stains or creases.
- If you sell expensive products and are too much anxious about this type of consumer fraud, you may want to implement stricter return polices like charging a restocking fee, shortening return windows or rejecting returns from serial abusers.
Reason 4. Refused delivery or uncollected parcels
While the product is being delivered, the consumer’s needs or circumstances may change. And it’s ok. According to stats, a quarter of Click & Collect products are actually never collected by customers, as well as a legion of packages is refused upon delivery, and this may happen for different reasons, namely:
- the customer has changed his/her mind and the product is no longer needed;
- slow shipping or delayed delivery;
- the consumer has found that same product at a better price.
- Offer an alternate product instead of the rejected one, thereby turning the return into an exchange.
- Consumers who do not collect their packages from the pick-up point or refuse delivery may be charged an administrative fee that will cover return shipping and handling costs and will be deducted from the issued refund.
- Personalization at every customer touchpoint as well as proactive digital communication with a buyer up to the very moment of product delivery and beyond is also pivotal. Sometimes such seemingly trivial things as sending your customer an email notification once the parcel has been delivered really may go a long way. The same holds true for notifying the shopper when the item is in stock or messaging them when the collection time is drawing near.
Reason 5. Deliberate fraud
It is wrong to believe that return fraud is a trouble spot for brick-and-mortar stores alone. In terms of online transactions, online retailers are just as vulnerable. Most commonly ecommerce return fraud takes three forms. They are:
- purchasing items through an ecommerce website by using stolen credit card data or bogus credit cards and returning merchandise at the multi-channel merchant’s physical store for a cash refund;
- sending back merchandise by mail and enclosing similar used items, which sometimes remains unnoticed until the return has been processed;
- cross-merchant, no-receipt returns when a thief buys items online, opens a claim for INR (item not received), initiates a chargeback and takes the items to the same merchant’s physical store to return them for cash or store credit.
- It is definitely worth investing in fraud prevention software that can monitor different behaviors of online transactions and automatically detect a fraudulent one. For example, the transaction coming from an IP address whose location does not fit in with either the billing or shipping address is likely to be a fraud.
- It also pays to track shopper returns to identify factors that might indicate return fraud, such as a large number of returns from one customer or an unusual amount of returns without receipts.
- Requiring a signature upon delivery as well as sending a receipt to a customer’s email is a sure-fire way to prevent cross-merchant, no-receipt returns.
The take-home message
Product returns are troublesome for retailers and consumers alike. Yet, they are inevitable. No matter how hard you may try, you’ll never be able to eliminate returns entirely, inasmuch as consumers tend to make hasty decisions and second-guess their purchases, let alone fraudulent orders, which is definitely beyond your control. However, uncontrolled returns may eventually take a toll on your bottom line unless you put a great deal of effort into developing a comprehensive return policy and its optimization.