Feel like you’re stuck in a costly game of pass the parcel? Yes, they’re a huge selling point when it comes to enticing potential customers. But they’re notorious for attacking profit margins, net sales and conversion rates – and can ultimately threaten your e-commerce business.
Financial professional services network KPMG estimates that returns cost retailers £7 billion per year. And it’s an issue that is only going to get worse due to inflation sending the costs of ‘reverse logistics’ soaring. It’s not just the costs involved in transporting unwanted items back to you. Products need to be inspected and then classified so they can go back into the inventory of your retail POS to be counted. In short, finding out how to reduce returns in e-commerce is a key issue if you want to protect your revenue and boost your bottom line.
And this is all without mentioning the terrible cost to the planet. The latest data from the British Fashion Council estimates that 23 million returned items are destroyed or sent to landfill each year in the UK, generating 750,000 tonnes of CO₂ emissions.
So far, so bleak. But brands are starting to fight back. Fashion retailer boohoo was among the first to break ranks, charging customers £1.99 per parcel, deducted from their refund amount, closely followed by Zara, Next and H&M. Some brands, including ASOS and boohoo, have gone even further in waging their war on returns, sending warning letters to customers they see as ‘serial returners’, reserving the right to suspend shoppers’ accounts.
But while the tide may be starting to turn, free returns still remain an unavoidable, costly headache for the majority of e-commerce brands wanting to meet customer expectations.
Wondering how to reduce customer returns for your own business, while keeping your shoppers on side? Listed below are six killer e-commerce return strategies you can use to slash your return rate, increase sales, and gain happy customers who keep coming back for more.
Optimise your online store
Get better visuals
Allow customer reviews
Look at your packaging
Analyse the data
Lengthen your returns policy
1. Optimise your online store
If a product is different to what a buyer expected, there’s a high chance it will be returned. It helps to get things right straight from the get-go. When you’re building your product page, ensuring your product descriptions are as detailed as possible will minimise customer disappointment. Accurate product detail, fewer returns.
Make sure you include details like size, weight and dimensions, and list every material (or ingredient) used to make the product. Size guides and fitting tools are vital for fashion retailers looking to prevent over-ordering caused by customers buying multiple products to get the fit they need.
Even if you’ve been selling online for a while, it makes sense to set aside some time to check your product details are still accurate to avoid unnecessary returns and streamline operations through ecommerce automation.
2. Get better visuals
The more accurate and realistic your product photos, the less likely it is that customers will be disappointed and create returns. Take shots from different angles, use diverse models, zoom in on details and use a dedicated photo editing app for ecommerce that uses AI to remove any background details. That way, customers can get a clear look at what you’re selling.
Consider uploading ecommerce videos, particularly if the product is complex to use. They don’t have to be big-budget productions. Short, simple videos showing a 360° view of the product or explaining how to use it are all you need to reduce returns.
3. Allow customer reviews on product pages
Online reviews impact the buying decisions of over 93% of customers, so allowing customers to add reviews to your online store could do double duty: increase your sales and reduce your returns. Encourage customers to leave a review of your product or service by email. You can even try persuading them by offering a discount on their next order. Then listen to what your customers are telling you. Whether it’s through reviews on your site, emails to customer service or comments left on social media, customers are constantly giving you signals about what’s not right. Use that valuable data to your advantage.
4. Look at your packaging
If you’re looking at how to reduce product returns within your own brand, one of the most impactful ways is to ensure items arrive in good condition. While your courier service undoubtedly plays a huge role in this, there’s still a lot you can do. Imagine the journey your items will take and base your packaging decisions around that. Think sustainable extra packaging for fragile items. Always use the correct parcel size so items don’t rattle around in transit.
5. Analyse the data
Analysing returns data can mitigate the impact of returns on your net sales, letting you see at a glance the products that come back to you the most. You could also adopt a returns form which requires the customer to state the reason for the return. This helps you reevaluate and update your pricing strategy, delivery costs, or stop promoting products with an unusually high return rate. You may even be able to identify any fraudulent activity.
6. Lengthen your returns policy
Return policies are one of the first aspects online buyers check before making a purchase. Most are 30 days or less. But if you’re wondering how to reduce returns in e-commerce for your own brand, you might want to double or even triple this.
Increasing the number of days a customer can return a product removes the urgency and may make way for a future event where the product comes in handy. Plus, customers are also more likely to be honest about their reasons for return, rather than just rushing to fill out the form just to get it done before the deadline. This results in more accurate return data for you.
Including a link on your final online checkout screen is a good way to notify users of your returns policy for the last time before they make their purchase.
Returns are a normal and expected part of running a successful retail business. But if it seems like the volume of returns you’re getting is high, it’s worth following the above steps to bring it down for the health of your business and the planet.
Contact our sales team to learn more about how Square could help your business.