Product returns are always going to be part and parcel of online selling. The nature of the online environment means that unless a customer visits a bricks and mortar store first, they can’t physically examine a product or service prior to purchase.
Although a bit of a nuisance, returns are expected even by the major online brands. The trick is to handle your returns as efficiently and effectively possible. If you have a well-managed returns procedure created with your customer’s needs in mind then returns can have positive impact on your business.
‘Our best customers have the highest return rates’ Zappos
Handling returns can be annoying but try to view your returns in a positive way. Online shoe retailer Zappos maintains it is their customers with the highest returns rate that spend the most money and are the most profitable. Successfully managed returns can;
- Improve retention rates and repeat sales through building customer loyalty
- Help conversions by acting as a trust signpost
- Showcase great customer service
- Provide a competitor advantage
How to keep your return rate low
Even with the positives a well-managed returns procedure can bring, there is no doubt that they can be annoying and can cost small businesses valuable time and money. Here are a few simple to implement tips to help you lower your return rates.
Realistic customer expectations. As we mentioned earlier because customers don’t have the opportunity to try the product before they purchase, they are reliant on the information you provide. Therefore the more accurate you are in your descriptions and the more realistic your imagery the less likely there will be a difference in what your customers are expecting to receive and what actually gets delivered.
- Product pages. Use accurate, detailed descriptions for every product. Imagery is essential, the more accurate the better. Try offering multi-angle or 360° photos. Video also works really well as it shows the product off motion.
Customer reviews. Customer reviews help manage customer expectations. For example if I was about to buy a top and wasn’t sure about the sizing, a customer review might mention that the top comes up on the large size so I would know to size down, consequently reducing the likelihood of me having to return the top.
Offer detailed guides and instructions. Many products are returned simply because a customer is struggling to put together or set up an item. Help them out as much as possible by including simple instructions and guides with the product. Have a video ‘how to guide’ on your website that you can direct them to and a helpline number that they can contact you on – it will reduce returns and save you time in the long run.
7 Best practice tips
Outlined below are seven best practice tips to you manage your online returns successfully.
1. Have a clear, easy-to-understand returns policy and procedure. Your website should clear returns policy and procedure. Take a look at clothing retailer White Stuff returns page. It focuses on their customer’s needs by making it easy to find, straightforward to understand and outlining their customers rights. Reiterate you returns procedure and policy on your invoice that is included with the product.
Ensure you are aware of the legal distance selling regulations for your country and the rights your customers have. For example in the UK you should be familiar with the Sales of Goods Act and the EU distance selling regulations. Changes to regulations in June 2014 extended returns to 14 days from receipt of goods. Useful websites include:
2. Offer free returns. For a small online business with narrow profit margins this may be a hard one to swallow but the benefits of offering free returns to your customers will usually outweigh any costs. Customers really won’t appreciate a hefty return postage fee cost and it will put people off coming back to you. Focus on the long-term benefit of customer retention. In addition providing free returns is a great selling point and can help with conversions so don’t forget to flag it up on your website.
3. Make it convenient. Successful businesses always have customer needs at the heart of everything they do. Think about how you can make your returns procedure convenient and hassle free for your customers. Try:
- including a pre-printed and pre-paid returns label in with your packaging. Offering a downloadable returns label like White Stuff on the returns page of your website is also helpful as many customers will mislay the one included with the product paperwork.
- think also about offering click and collect options to customers. They than have the option to return their item to a local click and collect shop at their own convenience.
4. Don’t argue over returns. This is another area where it pays to think long-term. Splitting hairs with customers over returns is going to lose you business and reduce your retention rates. Most returns will be genuine but sometimes you may just have to suck up a spurious return and focus on the bigger picture. Use a policy of ‘no quibble’ returns is a great selling point and can give you an advantage over your competitors.
5. Get feedback. Try to get feedback from your customers when they make a return. Feedback can be really useful as it can help you identify and tackle potential problem areas. For example if a number of products are returned because ‘product not as depicted’ it means you may need to address your product descriptions and improve your product images.
6. Prompt customer communications. The prompter you are in your communications with your customers the happier your customers will be and the more positive they will feel towards your business. As soon as you receive your customer’s returns, email them with confirmation of receipt of goods and inform them when they can expect to receive their refund. Contact them again when you have issued their refund. Customers will appreciate your efficiency and it will stop them having to contact your customer service department.
7. Resale on returned items. It’s not always possible to resell returned items at full price, for example if the packaging is damaged. So you’re not stuck with lots of returned stock taking up valuable storage space, it makes sense to get rid of it. Offer such products at a discounted price on your website – maybe under a ‘ clearance section’ or even on eBay. It may not give you the profit you wanted but it may mean you break even and avoid mounting storage costs. It is essential if you are doing this that you clearly state any damage – this way the customer won’t be able to return the item as he or she was aware of the damage prior to purchase.
Hopefully we’ve shown that returns aren’t necessarily a bad thing and that if managed well you can find ways to reduce your returns rate. Implementing a best practice returns procedure will also help your business in the long run in term of stronger customer relations, trust and goodwill.
We’d love to hear your thoughts and experiences on online returns, so please do leave a comment.