Online business owners trying to find ways to boost sales and profits need to take a closer look at their return policy. The mindset that returns cost you money is changing. If you are an early adopter, you can make a tidy profit.
Every business that offers some type of tangible goods will have customers who want to return those products to them. There are many legitimate reasons why a person will want to return a product and since you are dealing with online sales, you need to have a streamlined process that clearly maps it out, so consumers are fully aware of what is involved.
Ecommerce is booming. The current statistics indicate that the online retail industry as a whole has a value of over one and a half trillion dollars. Consumers are flocking to online stores for convenience as well as low prices, but because of its virtual nature, product returns are a much bigger issue for ecommerce stores than for their brick and mortar cousins.
The fact is that some products sold will be returned. It is an unavoidable standard in the industry. Part of a good online retail experience is an easy return policy. Today’s savvy customers are looking for this in an online store. Returns, when properly tracked, are a great way to vitalize customer service tactics, attract new customers and boost profits.
With Black Friday and Cyber Monday said and done, a high return rate is expected. Here’s what you need to know about how you can make your return policy a profit generator.
Common Reasons People Return Products
The following are some of the most common reasons why people return products they purchased online, but this is by no means an exhaustive list.
- Product was damaged while being shipped to the consumer. This can happen for a variety of reasons. Most commonly, the package was damaged, and the consumer rightfully sent it back.
- Wrong product was sent to the consumer. This could have happened because of an issue with your inventory control/order fulfillment processes or the consumer simply clicked the wrong button, in either case this is a common reason why the product was returned.
- Product did not meet the sizing requirements of the consumer. Since the consumer is shopping online, they have no way to try the clothes on. Your customer could’ve lost or gained weight since placing the order, but most likely they just got the wrong measurements.
All of these are perfectly valid reasons to return a product and the consumer is going to base their opinion of your business on how you handle these returns. Streamlining the return process will help you earn the future business of that consumer.
Reducing Online Product Returns
Something that you will need to do is look for ways to reduce the likelihood of a product being returned. These suggestions will help you streamline your processes while reducing the risk of having a product returned.
- Use reputable shipping companies to move your merchandise from the warehouse to the buyer in a safe, timely manner. These companies may charge a premium for their services, but the slight increase in cost offsets the hassles associated with processing a product return.
- Insist on using software that tracks your entire inventory. By having your inventory all recorded on one application, it will keep you abreast of any potential product shortages while at the same time helping the people responsible for order fulfillment ship the actual products your buyers want.
- Use both imperial and metric sizing charts on your listings. While most of the world is accustomed to the metric system, if you have customers who are more comfortable using imperial measurements, you will be able to help them find the properly sizes. Before you allow the purchase to proceed, always confirm the sizing details with the consumer, so the risk of having them receive the wrong sized product is substantially reduced.
Clearly Define Your Return Policy
Online retailers want consumers to come back to their website often to make purchases and leave positive reviews. If the consumer has a bad experience trying to return something, you won’t see the results you’re looking for.
Make sure you clearly define your return policy for every shopper. Let them know what can and can’t be returned, if there are any return shipping fees or restocking fees, and what your return-by dates are.
Take this a step further by including a link to your return policy in the shopping cart checkout process. Encourage shoppers to review it (66% already read it before buying) before they finalize their purchase. This may result in an increased cart abandonment rate; but will ultimately reduce the rate of returns across the board.
Offering a Brick and Mortar Shopping Experience
While your business is based online, there are steps you can take to provide your customers with a brick and mortar shopping experience. One of the ways you can do this is by providing consumers with the same type of product return experience they would have in the past at a physical store at the local mall.
In the past, a person would bring back the product and the exchange was handled without any hassles. If you can recreate that experience online, there is a strong chance that the consumer will want to buy from you often.
To do so, make return shipping easy. Offer a way for the customer to process their return online and generate a prepaid shipping label. Give them clear instructions on how to send their package back. Streamline these efforts by using integrated ecommerce returns software to automate your reverse logistics. Newer ecommerce returns software streamlines this by fully automating the process on both sides.
Leveraging Returns to Maximize Revenue
In the past, businesses treated product returns as a business expense, but it can be treated as an asset, too. While it is not an asset from an accounting point of view, if you are able to provide customers with a great return experience, they are going to talk about that experience with family, friends and associates online. This word-of-mouth advertising is still arguably the most effective way to drive traffic to an online business, or any business for that matter.
Even when a consumer returns a product, if you handle the return in a professional manner, a consumer could return to buy more and might bring along friends with them. That potentially negative experience of returning a product could turn into a selling opportunity when approached in the right way. What most business owners need to do is factor in the cost of returns into their pricing model and try to develop the most simplistic return policy possible.
Online retailers that are willing to adopt these customer-centric product return policies are going to gain an advantage over the competition, plain and simple.