Returns are an inevitable part of your e-commerce business and need careful planning and preparation. Reports say that about 30% - 40% of all sold goods are returned, with products worth $428 billion returned in 2020. Usually, customers return products because of dissatisfaction due to wrong product choices, damaged products, delayed delivery, a mistake in order processing, etc. Whatever the reason, careful execution of returns management is needed to avoid the worst.
According to Shopify reports, e-commerce returns will cost retailers a whopping $550 billion, constituting a cause of worry for them. However, better management practices and quality control can help avoid this. With an effective control system in place to check the quality of goods that leave your warehouse, ensure the right protection to prevent damage during shipping, and ensure that the right goods are delivered to the customer, you can eliminate returns due to business errors or inefficiencies.
Albeit, returns cannot be eliminated, with more than 70% of returns made due to customers not liking the product, buyer remorse, or other customer-preference-based reasons. Therefore, the need to have a solid strategy for better returns management and prevent them from slimming down your profit margins. This article will guide you through e-commerce returns management optimization for a better customer and employee experience.
Reasons for E-commerce returns
Customers return products due to several reasons, and a good knowledge of these reasons is the first step in cutting down product returns for your e-commerce business. Due to the peculiarity of the e-commerce industry, the industry experiences more than double the number of returns experienced by stores. businesses. 20% of e-commerce sales are returned, while just 9% of sales made from physical stores are returned. The following are some reasons why customers return goods and the frequency of occurrence.
- Size too small or too large: 52%
- Changed mind: 12%
- Style: 8%
- Not as described: 5%
- Defective: 5%
- Others: 18%
Best Practices for E-commerce Returns
The inevitability of returns in e-commerce has made it impossible for e-commerce businesses to ignore it. A seamless and efficient returns policy may be the difference between you and your competitors, giving you a competitive edge while increasing customer confidence in your brand, helping you maintain them, and maintaining business sustainability and profitability.
Some strategies for efficient returns management are
- Use returns management software e.g. Happy returns, loop, Returnly, etc.
- Outsource returns management
- Return products to the store
- Return products to the warehouse
The ultimate goal of returns management is to minimize the number of returns you’re getting for increased business profitability. Here are some best practices to help ensure effective and efficient returns management.
Have a clear and easy-to-find returns policy
A clear returns policy states how to go about product returns and what is expected of your customers. The policy should be easy to understand and very conspicuous on your website page, with clearly set deadlines, telling your customers what’s expected of them in the returns process.
A clear policy makes the returns process easy for your customers, builds their trust in your brand, and also ensures the products get back to you undamaged. Thus, maintaining profitability and boosting business growth. A good return policy should include a shipping policy that covers returning products with shipping lines from China to UAE, for instance.
Automate your returns process
This can help you reduce the pain and stress of returns management while reducing costs and streamlining the entire process. The various stages of the returns process can be automated using various software and technological applications to help simplify the process. In addition, automating returns management makes the returns process easier and simpler for your customers, encouraging repeat businesses and business growth.
Outsource returns management
Outsourcing returns management to 3PL companies makes the process more efficient, saves cost, and takes off the stress from your business, allowing you to focus more on other business aspects for more profitability. Another benefit of outsourcing your returns process is integrating automation into the various stages of the process, making for increased efficiency.
Accept product returns to your physical store
Shipping products back to the warehouse or fulfillment centers can sometimes be stressful for your customers, giving them a not-so-great experience with you. However, this can be solved by having close-by physical stores where they can easily return products. This will increase customer satisfaction while also providing you with an opportunity to upsell another product of equal or greater value.
Other practices include
- Make return labels easy to print
- Offer free shipping for returns
- Illustrate your returns process
- Make your returns process sustainable
- Keep customers informed about the status of their returns
- Continuously review and update return policies, etc.
Effective return management can help you turn your returns into profits. However, the following practices can minimize the number of returns you get.
- Make product information accurate and easy to find
- Use 3D/AR on your website
- Pack and ship items securely
- Have an efficient quality control system, etc.