Returns, Refunds, Free Shipping: Your eCom Guide
Posted: Sun Dec 22, 2024 10:22 am
Repeat customers are good for business… but refunds and repeat returns are not. While returns are an integral part of retail, some customers make an art out of them.
Whether the motives are fraudulent or simply inconsistent, serial returns hurt your bottom line. According to Appriss Retail’s Consumer Returns in the Retail Industry report , fraudulent or abusive returns cost U.S. retailers $23 billion each year. In addition to the refund, online retailers also pay for shipping and packaging, not to mention the salaries of the employees who handle the merchandise.
Returns are a double-edged sword. A study by MIT Sloan Management Review found that about 52% of customers make justified returns, and they contribute $1,289 to a retailer’s profits each year. Furthermore, the ability to return an item and request a refund is an important factor in their choice of retailer. Abusive returns, on the other hand, represent less than one percent of customers but cost a retailer $1,119.
Cost of refund and abusive returns
Source: MIT Sloan Management Review
Unfortunately, serial returners are on the rise. A study by Brightpearl found that 42% of US retailers report an increase in this type of activity over the past 12 months, particularly among customers aged 18 to 34. This is partly due to the rise of bracketing in online retail – more on that later.
Flatly refusing returns would likely lose you customers, but there are a qatar cell phone number number of steps you can take (from minimal to extreme) to reduce the number of serial returns you encounter.
Start with your return policy
Make your return policy clear and easy to access on your website. It would also be best to include it in the confirmation email you send after a purchase. Ideally, you would include the following information:
How to initiate the return process?
What are the deadlines for the customer to return or exchange the purchased item?
What are the return procedures?
What should the customer include (packing slip, return form included in the packing slip or available online, original packaging, price tag, etc.)?
Who pays the return shipping costs?
What items are not returnable (e.g. used items, underwear, or custom orders)?
How can the customer contact you if they have questions?
It’s important to make your returns, exchanges and refunds process as simple and transparent as possible. In fact, nearly half of consumers will review it before making a purchase, according to Narvar’s 2018 Consumer Reports study, The State of Returns: What Today’s Shoppers Expect . Seventy percent of respondents also said that being able to easily return an item would increase their loyalty to a retailer.
To strike a balance between a good return policy and protecting your business, consider limiting the return period to 30 days instead of 60 or more.
Should you offer free returns?
Customers love free shipping, but you can take the lead on returns by only offering it on purchases over a certain amount. This will reduce the number of smaller purchases that could be returned individually. And consider whether to adopt a “free returns” policy carefully, because while customers also appreciate this perk, they’ll think twice about returning an item if they have to pay for shipping out of pocket — especially if it’s to return a cheap product.
Similarly, require that an item be returned unused, in its original packaging with the original price tags attached. This will help reduce “wardrobing,” a type of fraud in which a customer uses the item before returning it to you. This is common with expensive, lightly used items, such as formal wear, tools, or some consumer electronics.
According to a study by Appriss Retail , nearly 40% of retailers have experienced this practice. Have your staff carefully review returned items and enforce your return policy restrictions if they suspect abuse. Don’t be afraid to refuse the return or contact the customer, especially if they’re a repeat customer, and offer them a voucher instead of a refund.
Whether the motives are fraudulent or simply inconsistent, serial returns hurt your bottom line. According to Appriss Retail’s Consumer Returns in the Retail Industry report , fraudulent or abusive returns cost U.S. retailers $23 billion each year. In addition to the refund, online retailers also pay for shipping and packaging, not to mention the salaries of the employees who handle the merchandise.
Returns are a double-edged sword. A study by MIT Sloan Management Review found that about 52% of customers make justified returns, and they contribute $1,289 to a retailer’s profits each year. Furthermore, the ability to return an item and request a refund is an important factor in their choice of retailer. Abusive returns, on the other hand, represent less than one percent of customers but cost a retailer $1,119.
Cost of refund and abusive returns
Source: MIT Sloan Management Review
Unfortunately, serial returners are on the rise. A study by Brightpearl found that 42% of US retailers report an increase in this type of activity over the past 12 months, particularly among customers aged 18 to 34. This is partly due to the rise of bracketing in online retail – more on that later.
Flatly refusing returns would likely lose you customers, but there are a qatar cell phone number number of steps you can take (from minimal to extreme) to reduce the number of serial returns you encounter.
Start with your return policy
Make your return policy clear and easy to access on your website. It would also be best to include it in the confirmation email you send after a purchase. Ideally, you would include the following information:
How to initiate the return process?
What are the deadlines for the customer to return or exchange the purchased item?
What are the return procedures?
What should the customer include (packing slip, return form included in the packing slip or available online, original packaging, price tag, etc.)?
Who pays the return shipping costs?
What items are not returnable (e.g. used items, underwear, or custom orders)?
How can the customer contact you if they have questions?
It’s important to make your returns, exchanges and refunds process as simple and transparent as possible. In fact, nearly half of consumers will review it before making a purchase, according to Narvar’s 2018 Consumer Reports study, The State of Returns: What Today’s Shoppers Expect . Seventy percent of respondents also said that being able to easily return an item would increase their loyalty to a retailer.
To strike a balance between a good return policy and protecting your business, consider limiting the return period to 30 days instead of 60 or more.
Should you offer free returns?
Customers love free shipping, but you can take the lead on returns by only offering it on purchases over a certain amount. This will reduce the number of smaller purchases that could be returned individually. And consider whether to adopt a “free returns” policy carefully, because while customers also appreciate this perk, they’ll think twice about returning an item if they have to pay for shipping out of pocket — especially if it’s to return a cheap product.
Similarly, require that an item be returned unused, in its original packaging with the original price tags attached. This will help reduce “wardrobing,” a type of fraud in which a customer uses the item before returning it to you. This is common with expensive, lightly used items, such as formal wear, tools, or some consumer electronics.
According to a study by Appriss Retail , nearly 40% of retailers have experienced this practice. Have your staff carefully review returned items and enforce your return policy restrictions if they suspect abuse. Don’t be afraid to refuse the return or contact the customer, especially if they’re a repeat customer, and offer them a voucher instead of a refund.