Online shopping is a quick and convenient way for your customers to buy what you need. However, what happens when your customer decides they no longer want an item? With online shopping, there is always the inevitable chance of your customer initiating online returns.
While it’s inevitable that every business (no matter the size) will have to deal with online returns, there’s a lot you can do to optimize the experience. Doing so can actually reduce the chances of your customers sending items back.
In this article, we’ll go over the effects of online returns; as well as how you can reduce any costs associated with them. Let’s get started.
The Statistics of Online Returns with eCommerce
Online returns are an ongoing issue that nearly every online business faces.
This is due to online shopping being on the up and up. Actually, in 2019, the global eCommerce industry generated $3.535 trillion in sales. In addition, experts predict by 2023 this figure will reach $6.542 trillion. Moreover, this inevitably comes with an increase in returns.
Average Online return rates
It’s actually hard to pin down an industry average due to the variation in eCommerce return rates.
In 2016, CNBC reported that retailers often have eCommerce returns as high as 30%, and clothing sites can see online return rates as high as 40%. In addition, most of the time the rate of returns can hover at around 20% for many online stores. However, online returns tend to spike up to 30% or more during holidays. Lastly, when it comes to the costs of online returns, reports state that returns are predicted to cost nearly $550 billion!
For many online retailers, giving refunds for almost a third of the orders you ship can be painful; not to mention having to pay for the cost of the return shipping. Nonetheless, order returns are a vital process for your online business. Instead of viewing returns as a pain, think of them as a crucial part of your customer retention and loyalty system.
6 Reasons a Customer Initiates Online Returns
There are many reasons for a customer to return an item or order.
One main reason is that online shoppers aren’t able to really see, touch, or try on a product before buying. Therefore, when the product finally arrives, its customers may find that the item does not actually suit them.
The following are 6 reasons for customers returning items:
Fault or damaged:
Without proper handling and care, packages can sometimes arrive with damage. This most likely happens during the transit of order in transit to your customer; damages can also occur from poor packaging. Therefore, customers are more likely to want a replacement or a refund.
Products are not as described:
Customers typically shop online in faith the product will be what they expect.
This is due to the fact that they are not able to see or touch the product before buying. Once your customer realizes the product does not live up to its description, or their expectations, they’ll want to return it. To avoid this, you should make sure that your product pages feature a lot of details; including good photos and detailed descriptions.
Poor quality:
If a product is made with poor quality, it’s no surprise that your customer will want to return it. This can be a particular problem for dropshipping operations since you’ll have no chance to check the product before it goes to the customer.
Issues with delivery:
Delivery issues can often arise; especially when you’re shipping overseas! Things happen. Nonetheless, there are plenty of things you can do to prevent this. From picking a reliable courier, partnering with a third-party logistics company (3PL), to pre-paying taxes and duties, and or using solutions with good tracking.
No longer want and item or ordered duplicates:
Unfortunately, customers can end up changing their minds about their orders. Ultimately, this results in the customer no longer wanting (or needing) it. The same goes for duplicate items!
In most cases such as these, you may just have to issue a refund.
The Cost of Online Returns and Poor Management
It’s no surprise that product returns can erase your profit on sale items.
For online retailers, those return rates will also always be higher than brick-and-mortar. In fact, 57 percent of businesses report that dealing with returns negatively impacts their daily operations. Moreover, 20 percent report having to increase the price of their products to offset the cost of customers returning items.
Nonetheless, there’s a lot you can do to better your customer experience and reduce the chances of customers needing to send items back.
Reducing the Cost of Returns
When it comes to reducing the cost of returns, the solution lies in your return management processes. This process actually goes beyond the final delivery.
Returns management is a process in retail and eCommerce that involves interacting with customers who want to return a product. Moreover, managing returns is part of customer support, part logistics, and inventory management. In addition, the management process also involves collecting, organizing, and restocking returned or exchanged inventory.
Managing your returns is not the only thing that helps reduce costs.
Having a return policy can also improve sales as it can influence a customer’s choice to shop with you. According to a UPS study, 88% of shoppers review return policies while shopping online; 67% of shoppers also check the return policy before finishing an order. Additionally, not having a return policy shows that 15% of shoppers will completely abandon their cart.
What Is a Return Policy?
A return policy is the set of rules that manages how and when customers can return items back to you. Oftentimes, companies tend to include this as an afterthought as part of their shipping policy. However, that is not enough. Generally, companies will provide an option to return a product for either a refund or an exchange for a different item. Some companies even offer store credit for use at a later date.
Ultimately, it is best practice to make sure your return policy is easy to find and the language is easily understandable.
What’s Next?
There’s no way you can escape online returns from your customers. Nonetheless, by improving your return processes, you will greatly reduce the negative impacts of returns.
Not sure where to start? Partnering with a 3PL is one step that you can take! 3PL companies, like Print Bind Ship, are experts in the world of order fulfillment; they also have many perks like return processing and fast shipping.
Find out how a 3PL partner can help you by getting in touch with an expert at Print Bind Ship here.