How to Reduce your Return Rate

When you’re running a retail business, returns are a fact of life, particularly for e-commerce businesses. But whereas overall return rates hover around 10 percent of all purchases, the rate is more than double for e-commerce specifically. Fortunately, you have the power to manage and reduce return rates before they break the bank. 

In developing a solid customer service experience, you’ve already thought about creating a thorough FAQ section and crafting a generous returns policy, putting customers at ease and making sure to educate them on exactly what they can expect from you. 

But once your e-commerce customers have hit “purchase,” how can you reduce the chance they’ll be returning those items? Or seamlessly manage those returns that do need to be processed?

Understand your numbers

Managing expectations starts on the retailer side by understanding how people shop. According to a 2018 survey, more than 40 percent of e-commerce shoppers made a purchase with the express intent of returning a product. 

When it comes to apparel — the majority of returns — customers might pick up two sizes just to see which fits bette. This practice is known as “bracketing.” They already know they’re going to get half of their money back, and that means you’ll need to be prepared to handle restocking expenses or even total losses if products come back damaged. But remember, bracketing and profit aren’t mutually exclusive. Some of the most e-commerce happy customers are also the most return-happy when they’re loyal to a brand that’s made returns and exchanges simple.

Next, take a look at your return rate. Which products are returned most often, when, and from which customers? An item’s high return rate could signal that your customers: 

• Are unhappy with its quality
• Expected something different
• Received a broken or damaged product
• Were unsure how a product would look, feel or fit once they had it in hand and therefore bought the wrong size or multiples to try

Fix the fixable

Reduce return rates before they start by describing your products in as much specific detail as possible. Clear descriptions and quality photography not only manage customers’ expectations, but they inspire confidence and excitement. Flesh out your product descriptions with:

• Excellent photography, including photos from multiple angles and even embedded video, allowing a model to demonstrate how your product moves
• Size charts that take the anxiety and guesswork out of picking the right pair of pants — and therefore cut down on the need for bracketing
• Specific details and claims that you can back up, rather than leaving customers wondering about vague descriptors like “excellent” or “attractive.”

Carry the same quality throughout your brand and supply chain, including:

• Your mobile site: A difficult mobile shopping experience can mean abandoned carts or more returns if customers couldn’t get a clear understanding of your products on their phones.
• Your storage and shipping partners: Consider third party logistics (3PL) for safely and dependably storing, shipping and processing returns. A partner can prevent small businesses from getting overwhelmed — and experiencing a dip in profit — with returned inventory, meaning your inventory is managed more efficiently.

E-commerce customers are in information-seeking mode when they’re deciding whether to buy. Set up an online review system so they can help one another decide. Not only does this offer you a chance to publicly respond and set things right with any dissatisfied customers, but it also gives you insight into issues within your control that you can fix.

Turn returns into exchanges

The majority of shoppers who return an item do end up exchanging it, and more than 70 percent of those customers rely on the original retailer to replace the item. So what happens to the rest of those customers who want to exchange a product rather than just return it?

Typically, two main factors test customers’ loyalty:

1. The item they wanted to replace is out of stock, or
2. They’ve had a negative return experience. 

Build easy exchanges into your customers’ shopping experience: 

• Immediately refund their payment
• Offer free returns and no restocking fees
• Include an easy-to-read form that allows customers to check “exchange” and fill out what size they’d like in return
• Provide a prepaid shipping label and/or prepaid envelope in the original packaging
• Allow customers to schedule a carrier pickup or exchange items in-store
• Include parcel tracking in a steady stream of email communication so both parties understand the shipping timeline

If you’d like to talk about how you can reduce the rate of your returns, contact us. You can call us at 1-866-289-9010 or email us at sales (at) owd (dot) com.