Handling Returns - Everything You Need to Know

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Read time: 5 mins

📆 Friday, 8th Dec 2023

Hi, and welcome back to Growth Espresso - your one-stop destination for everything e-com.

BFCM is a wrap! Consumers shopped in record numbers this year, much to the delight of e-commerce brands which got a big share of the overall spending pie. Shopify merchants drove $9.3 billion in sales beating last year’s record by a massive 24% (link).

But with great shopping comes great returning, especially driven by consumers who did impulse buying over the BFCM week. TrueFit research shows that GenZ customers will return a quarter of their fashion buys, while millennials will do for a fifth of their purchases (link).

In this edition, we’ll talk about Returns - and what steps your brand can take to minimise the impact and prevent it further.

Handling Returns - Everything You Need to Know. Coming right up 👇️ 

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↩️ Managing Returns

1: Return Initiation

E-commerce carriers often offer return services, easing the return process and ensuring safe item transit. Alternatively, customers might return items to a specified facility, necessitating clear instructions for packaging and labelling to facilitate smooth processing.

2: Routing to Facilities

Returned items typically head to source locations or central warehouses. Opting for nearby warehouses or retail stores can reduce costs and enhance inventory distribution, particularly for high-demand items, minimizing logistics expenses.

3: Receiving and Quality Control

Dedicated stations streamline QC, preventing mix-ups. Specially trained teams inspect returns for damages, wear, wardrobing, or resale value discrepancies.

4: Restocking, Disposal, or Vendor Returns

Approved products undergo standard putaway procedures for future orders. Damaged items are earmarked for disposal, while defective ones may be returned to vendors under warranties.

5: Incorporating Customer Feedback

Acting on customer feedback reduces return rates and fosters stronger relationships. Feedback highlights recurring issues like sizing problems or misleading product descriptions, allowing policy adjustments or product improvements. Addressing late arrivals prompts enhancements in shipping processes.

A robust reverse logistics system facilitates returns and leverages customer insights to refine processes, fostering trust and loyalty in an evolving e-commerce landscape.

✋ Preventing Returns  

According to a study by PowerReviews, item doesn’t fit (70%) is the leading reason for e-commerce returns, closely followed by received damaged or defective items (65%), and the product does not match the description​ (49%). Here are some pointers you can incorporate to reduce returns in the first place.

1: Improve Fulfillment Accuracy

An efficient fulfilment process can always reduce the e-commerce return rate. By refining the pick, pack, and ship processes and partnering with reputable carriers, you save on return costs and elevate customer satisfaction. Remember, the aim is to get the order right the first time, every time.

Implement barcode scanners for precise product code matching during order processing, minimizing errors, while integrating the warehouse management system with carrier services for real-time tracking, ensuring accurate shipping estimates and timely deliveries, thus reducing instances of customer cancellations or returns due to unexpected delays.

2: Enhance Fraud Prevention

Understanding return fraud involves recognizing several deceptive practices: "wardrobing," where used items are returned as new, counterfeit product swaps, and false damage claims for undamaged goods. Preventing fraud requires clear return policies, product authentication, meticulous inspection, leveraging customer data for patterns, and proactive alerts to deter abuse.

These measures aim to define acceptable returns, authenticate products, train staff for detection, use analytics to spot suspicious behaviour, and notify customers to discourage exploitation of return policies.

3: Optimize Product Pages

An optimized product page can set clear and accurate expectations and communicate e-commerce returns policies to minimize logistical and financial challenges. Steps you can take:

• Comprehensive Descriptions: Detail product specifics to minimize uncertainties.

• Multi-Angle Imagery: Display various angles to reduce post-purchase dissatisfaction.

• Size Clarity: Offer standardized size charts to decrease size-related returns.

• AR Integration: Use AR for virtual "try-ons" for a more accurate view.

• Transparent Policies: Clearly state return terms on product and checkout pages to encourage review before purchase.

4: Maintain Competitive Pricing

Maintaining competitive pricing is pivotal, not just for attracting but also for retaining satisfied customers post-purchase. Buyers often compare prices across platforms, seeking assurance in their choice; competitive pricing alleviates buyer's remorse and discourages returns if a lower price is found later.

Consistent competitive pricing cultivates brand loyalty, decreasing the urge to shop around and fostering overall satisfaction, ultimately reducing return rates.

Content credit: Hopstack