Following Black Friday and Cyber Monday, every eCommerce shop owner braces for the inevitable. Returns. And lots of them!
Managing returns properly is the difference between keeping customers and losing them, turning a profit and recording a loss. Depending on who you ask, eCommerce store owners can expect anywhere from a 31% to a 60% increase in return rates after the Black Friday weekend.
Imagine your standard eCommerce shop owner: working her way through a mountain of returns, sifting through packages, and trying to keep inventory records at least somewhat close to reality, and – on top of all that – trying to keep customers happy.
It’s a lot to ask of any business owner! That’s why it’s so important to have a clear plan for handling returns after the big surge of sales on and around Black Friday and Cyber Monday (BFCM).
Returns really matter in eCommerce, especially after Black Friday & Cyber Monday.
It’s worth asking at this point – what’s really at stake when it comes to returns? After all, if the items are being sent back, the customer is unhappy, right?
Not necessarily, and in fact, there are a lot of different reasons why handling returns well matters, even if it looks like the end of the customer relationship.
1. Volume Surge: Every year, BFCM shatters previous online sales records. This surge inevitably leads to a spike in returns which must be processed efficiently. A surge in returns doesn’t necessarily reflect on the product itself but is the result of a surge in order volume. No matter how hard you try, some shipments will break in the mail and some shirts just won’t be the right size. And, of course, some people just simply don’t like their gifts. BFCM exacerbates problems like this.
2. Brand Reputation & Trust: Your return process is a reflection of your brand. Make it smooth, and you enhance your brand image; bungle it, especially during peak return times, and you risk losing trust. Negative return experiences can easily translate to one-star reviews, leaving a lasting dent in your brand’s reputation.
3. Customer Loyalty & Retention: A return isn’t necessarily a lost sale. In fact, you have a chance to win back the returner’s business. When customers find the return process satisfactory, they’re more inclined to shop with you again. One study by IMRG estimates that 92% of customers say they will buy again if the returns process is easy.
4. Operational Efficiency & Cost Management: Efficiency in returns directly affects your bottom line. Streamline your processes and it will help you keep costs in check. Mishandling returns can further inflame existing inventory management challenges, erode sales, and inflate customer service expenses.
5. Feedback & Continuous Improvement: Every return is for a reason. So ask for feedback—about product quality, accuracy of descriptions, or alignment with customer expectations. This feedback is a goldmine for refining your offerings and processes.
No matter how you look at it, you can’t ignore how important the returns process is. Treating it as an afterthought is a mistake.
So with that in mind, here is a six-step process to master your returns strategy.
1. Reduce returns before they become an issue.
It’s a matter of fact in eCommerce that returns are unavoidable. According to eMarketer, around 20-30% of eCommerce orders are returned. So imagine how much of a difference you can make if you were able to cut that down by even a couple of percentage points.
Luckily, there are some very simple things you can do to reduce the odds of merchandise being returned:
- Write Detailed Product Descriptions: A well-crafted description helps people know what they’re buying, painting a vivid picture of the product’s features, benefits, and potential applications. When a customer reads this, they should feel the contours of the product, its weight, its purpose. Remember – people can’t pick up the item and inspect it like they can offline in the store.
- Use Accurate Sizing Charts: Especially for industries like fashion, sizing issues have a huge impact on returns. An intuitive, globally comprehensible sizing chart helps customers make the right choice.
- Use High-Quality Images/Videos: This further builds on detailed product descriptions and sizing charts. Quality video gives potential customers yet another way to inspect the product before they make a purchase that they will later regret.
In addition to these simple changes, which require only making modifications to the website, it is also best practice to encourage customers to provide feedback on your products. Then once you make their changes, current and future customers are more likely to be pleased with your product. It’s also a good idea to take a proactive mindset to quality assurance so that you can reduce the odds of defective items shipping out.
2. Make your return policy crystal clear.
Reducing returns is a great start but eliminating them is impossible. So when customers need to make a return, it should be clear how they can do so.
One easy way to do that is to make sure all the essential parts of your return policy – length of the return window, acceptable product condition, and people associated fees – are clearly visible. Strategically positioning the return policy at frequently accessed spots ensures it isn’t overlooked. This could be the footer, an FAQ section, or the all-important checkout page.
Over 60% of customers will look for a return policy before purchasing. And if they don’t find it, the odds are pretty good that they won’t purchase. To that end, if someone wants to see your return policy, you should make sure it’s hard to miss.
3. Make it easy to return products.
The post-purchase experience is just as crucial as the journey leading up to the sale, if not more so due to the power of customer retention. And if it’s customer retention you’re after, then making returns hassle-free can significantly impact customer loyalty and trust. Here are a few ways you can do that.
1. Prepaid Return Labels: By allowing customers to print prepaid return labels after starting the return process, you are not only facilitating an easy return for your customer but also subtly conveying that you value their convenience. This prevents your customer from having to buy postage – usually involving a trip to the post office or UPS store – and is particularly appreciated by customers who may be hesitant about the complexities of return procedures.
2. Reusable Packaging: In addition to being eco-friendly, reusable packaging offers customers a simple way to return items. With clear instructions, customers can repurpose the original packaging, reducing waste and simplifying the return process.
3. Flexible Return Windows: Extending return windows during peak periods, such as the holiday season, could be a good way to show your brand’s empathy. This flexibility acknowledges that the festive rush might delay some returns, and by accommodating this, you build a rapport rooted in understanding.
4. Streamlined Backend RMA Processes: The ease of a return isn’t just about what the customer sees; it’s equally about the efficiency of the backend processes. By optimizing your Return Merchandise Authorization (RMA) system, you ensure that once a product is sent back, it’s processed swiftly. This not only reduces inventory lag but assures the customer that their return is being handled promptly.
With ease in mind, returns can be turned from irritations into opportunities for fostering trust. Simplify and humanize your return process, and that can help set the stage for increasing customer retention.
4. Use the return process as a chance to provide great customer service.
Prompt communication is essential. When customers ship off a return, a simple automated email acknowledging that their return has been accepted goes a long way. It tells them their issues matter and are being addressed swiftly.
If it’s amenable to your business model, you can also offer product exchanges too. By suggesting alternative sizes, colors, or products, you have a chance of keeping the sales revenue without being too salesy in your approach.
We touched on this previously, but it bears repeating. Understanding why customers return items is very important. When a customer initiates a return, use a brief (and we do mean brief) survey to figure out why. This will let you troubleshoot issues with your business operations or products, but it’s also a nice way of communicating to customers that you care about why they’re choosing to return merchandise.
Lastly, dedicated support during the return process, whether via helplines or chat, will go a long way to reinforcing your brand’s commitment to its customers. Quick, helpful responses make customers feel valued.
5. Figure out what to do with returned merchandise.
Some returns are inevitable. But that doesn’t mean you have to write off every returned item as a loss. You have three basic options for handling your returned merchandise:
Restock, resell, or recycle: This approach revolves around reintroducing the returned product back into the sales cycle. If the item is in pristine condition, it can be restocked. Slightly imperfect goods might find a home in clearance sales or discount sections. And for products that don’t make the cut? They can be sustainably recycled, which will make your brand look better in the eyes of customers, who are – on average – continuously caring more about environmental responsibility.
Liquidate: Sometimes, the most practical step is to sell returned merchandise in bulk, often at discounted rates, to liquidators. These businesses then resell these products, ensuring they don’t go to waste, providing an easy solution for retailers keen on clearing warehouse space.
Partner with charities: While this option won’t help your business turn a profit, there’s still a business case for doing this. Through charitable works, your business can benefit from tax breaks and from improved brand reputation. Not to mention, donating unsellable merchandise to charitable organizations can enrich the lives of the less fortunate, which is an excellent thing to do for its own sake!
It’s also worth analyzing and possibly adjusting inventory levels based on the patterns you see as well. Consistent patterns in returns could indicate a mismatch in demand and supply. By closely studying these trends, you can fine tune your inventory levels and possibly dial back on overstocking.
6. Automate the returns process as much as possible.
Automating the returns process in eCommerce isn’t just about convenience, though that is very important when you take into account your own mental well-being as a business owner. It’s also a strategic move that directly impacts operational efficiency and customer satisfaction.
When a customer decides to return an item, having software in place that instantly connects this action to your inventory and customer management systems ensures that both your team and your customer stay informed. This means returned items can be quickly accounted for in inventory, and the customer receives timely updates about their return status.
With automatic Return Merchandise Authorizations (RMAs), warehouses are instantly alerted of returns, speeding up the process. This reduces storage time for returned goods and minimizes administrative tasks, freeing your team to focus on more pressing matters.
One key step to automating returns is to select the right order fulfillment partner. Not every order fulfillment partner is capable of processing returns quickly, and finding one that can is really important. If you’re currently looking for a new order fulfillment center or think you might need to start working with one soon, this is something to definitely consider.
Handling returns efficiently is tremendously important for eCommerce businesses, especially after major sales events like Black Friday and Cyber Monday. Before the holidays begin, outline a clear strategy that not only streamlines backend operations but takes customers and their experiences into account every step of the way. You’ll be glad you did.
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