When a customer is choosing whether to purchase from your website, your return policy may be their deciding factor. If your return policy is confusing, strict, or nonexistent, it could be heavily impacting your conversion rate. In this article, we’ll show you how to handle eCommerce returns in a way that will boost your conversion rate and create more happy customers. Don’t miss this chance to create a return policy that elevates your brand.
Why should you care about eCommerce returns?
Savvy shoppers expect retailers to offer a fair return policy. A study by UPS shared that 66% of shoppers review the return policy before purchasing from a retailer. Of those shoppers, 81% will only finalize their purchase if the retailer allows free returns. That can be good news or bad news for your business, depending on how you currently handle ecommerce returns.
Designing a superior return policy is an easy way to set your business apart from its competitors. By offering to handle online returns in a way that gives customers confidence in their purchase, you can sway shoppers to choose your business over another retailer.
The Anatomy of a Great eCommerce Return Policy
A great online return policy shows potential customers that you have confidence in your own products. How do you know if your return policy is up to par? Make sure you cover all the fundamental objections that a customer may have. Use your return policy to give a customer full confidence that it is safe to purchase your products.
These elements should be included in every retailer’s return policy:
- Items can be returned for a full refund if:
- The wrong item was shipped out.
- The item was damaged prior to delivery.
- The item is defective.
- The product does not match the online description.
To cover your liability, set a time limit for returns. For example, “Orders may be returned for a full refund within 30 days of the original delivery date.”
Consider adding these elements into your return policy so customers can purchase with complete confidence:
- Items may be returned for a full refund or exchange if:
- The customer changed their mind and the item is unused and unopened.
- The item does not fit, or the product quality does not meet expectations.
Want to see it in action? Here is a template you can use as the basis of your return policy:
Differentiating Your Business with a Superior Return Policy
How can you sway customers to choose your company over another? Do some research on your competitors’ return policies, so you can pinpoint easy ways for your business to offer more value. For example, if all of your competitors offer free returns for 30 days, you can stand out with a return policy that lasts 45 to 60 days.
Nordstrom is a perfect example of this. While many retailers don’t allow returns after 30 to 90 days, Nordstrom stands out by offering full refunds – even on used items – with no expiration date.
Most customers won’t test it out, but a great return policy can give them encouragement to take a chance and purchase from your website.
How to Handle the Logistics of eCommerce Returns
Now that you’ve designed a great return policy, you’ll need to organize an efficient workflow for returns. Do you have the infrastructure to handle the logistics of ecommerce returns? Keep in mind that seasonal fluctuations, such as winter holidays, can cause a drastic increase in returns. Make sure you are designing your logistics in a way that is scalable.
Ask these questions to design the right returns process for your company:
Where should returned items be shipped? Should they be returned to the same address as your regular inventory deliveries? Consider asking customers to indicate the return on the outer packaging of their box. This can streamline your inventory management and ensure returns are correctly processed.
Will you require that customers obtain a Return Authorization (RA) number before shipping items back to you? If so, ask the customer to write their RA number on the outside of the box in addition to including it on a note inside the box. Once their product is returned to you, your staff will need a way to quickly identify it and process a refund. For techy products and those that require assembly, this can be an opportunity for your staff to reduce unnecessary returns due to incorrect use or improper assembly. Alternately, if you want to reduce the strain on your customer service team, you can create an online returns management portal where customers can easily request an RA number and print out a return label.
Will you require your staff to inspect the returned product? Or will you offer your customers an instant credit on good faith? If inspecting returns takes up scarce resources, consider whether it’s truly necessary to your operations. While you may be more comfortable with offering a store credit, we recommend offering a refund in the original form of tender (e.g. to the credit card it was purchased with).
Can you return the product to your inventory? If not, should you allow your customer to simply keep the product and issue them a refund? Edible products (such as supplements or teas) and personal items (such as bras, socks, and underwear) are often ineligible for return. In these cases, you can keep your customers happy by simply offering them a refund in good faith. You can even encourage them to give the item to a friend or donate it to someone in need, promoting a win-win situation. This solution can help your business avoid unnecessary and time-consuming returns. Plus, your customers will be delighted that they don’t have to make a trip to the post office. These details can turn an otherwise frustrated customer into a loyal advocate who is willing to share their experience with friends.
Should you charge customers a restocking fee? We do not recommend this. While retailers do need to consider the costs incurred from returns, charging a restocking fee can lower your conversion rate.
How will you keep customers informed of their returned order status? To avoid straining your resources, set up an automatic email to alert customers when returned item(s) are received and refunded. This will help reduce email inquiries, and antsy customers will appreciate your professionalism.
Should you outsource or handle eCommerce returns in-house?
The most scalable solution for returns management is to use a fulfillment center. Partnering with a reliable third-party logistics provider (3PL) gives you access to specialized staff while reducing costs and remaining flexible to your seasonal needs. By outsourcing to a 3PL, your business can design an efficient returns process and provide a superior customer experience year-round.
If you decide to handle returns in-house, create a plan of action for seasonal increases. By documenting your company’s standard operating procedures, you can enable your business to hire and train new team members more easily during busy months.
How will you handle ecommerce returns?
Crafting a great return policy is an opportunity to set your company apart from the competition. By handling online returns in a way that gives customers peace of mind, you can woo new customers and increase ecommerce sales. However, a return policy that shoppers deem unfair or confusing can be a significant barrier to new customer sales. Don’t miss this chance to convert more shoppers into buyers.
If you decide to offer free returns, mention this proudly in your marketing campaigns. The more comfortable shoppers feel with your company, the more likely they will be to complete their purchase.