Wow, sales accumulating on your e-commerce website is exciting!
All of the sudden your hard work in setting up your virtual store is paying off! You're even "making money while you sleep.”
Returns, however can easily take the fun out of your retail dreams and significantly hurt your income stream. This is especially true after the holiday season when returns run into the following year and can start your new year off in the red.
It's estimated that as many as 30 percent of items purchased online are returned and that rate increases as the price of the item increases. E-commerce, on average, has more than triple the return rate compared with brick and mortar stores because it’s of course easier.
Fortunately, there are several things you can do to reduce returns for specific items and lower the overall return rate for your e-commerce store.
Tips for reducing online returns
1. Have strong pre-sales support for your customers
Being proactive and offering good pre-sales customer support can go a long way to reduce returns and increase your customer experience..
This means helping shoppers find the items they are looking for, answering any pre-sale questions and concerns and even in B2B sales, pre-qualifying the customer to make sure what he is buying is really what he needs. And, a good pre-sales support function isn't just good for minimizing return rates. According to Harvard Business Review, companies with strong pre-sales support functions realized consistent rates of 40-50 percent new business and 80-90 percent return business.
You can do this in many ways. You can be very responsive to your emails and social media messages or you can provide a chat option that allows customers to interact with a customer service rep in real time.
2. Have an extensive FAQ page
Another good policy is to anticipate your customers' questions and concerns about size, fit, shipping policies and other similar issues. For example, a customer might return an item if it didn't arrive before a special occasion, such as a birthday or wedding. She might have been able to pay for expedited shipping if she understood your regular shipping policy.
3. Redouble your efforts on product images and descriptions
Customers often return items because they aren't what they expected or isn’t quite what the retailer said it was. While some of this is inevitable, you can help reduce this confusion by posting large, clear pictures of your merchandise, ideally from multiple angles, and making sure that your descriptions are clear and cover all of the relevant buyer intent information. Customer product reviews also play an important part.
4. Do what it takes to get the item to your customer intact
Approximately 20 percent of product returns occur because the item was damaged in transit. This is one of them most costly scenarios for an e-commerce retailer, since a single transaction all of a sudden costs you two items and two shipping expenses. Saving a little bit on packaging upfront can easily be outweighed if your items aren't arriving safely. And, that doesn't even factor in the customer disappointment of opening a package only to find their item in pieces.
5. Put a good system in place for processing orders
Nearly one-third of returns occur because the customer received the wrong item. Not only is this expensive and entirely avoidable, but it impacts the customer's impression of your company and her likelihood to purchase from your store again. As your e-commerce operation continues to grow, the chances for shipping errors can grow exponentially. At first, it's easy (and exciting) to pack up that order. Then, when more and more orders come in, you'll likely find that you haven't allotted the necessary time for this critical (but not that interesting by the 1,000th order) function. Simply adding a final check of the product and the order before the package is sealed can go a long way towards reducing returns.
The best plan is to set yourself up for success by putting your order fulfillment system in place at the beginning, before your store volume takes off. If you're already handling dozens of order each day, step away from the hectic holiday season traffic and get that system in place.
6. Incorporate customer reviews in your shopping pages
Customer reviews about a product help other new customers make a decision about whether the product they are considering is right for them. Amazon does a brilliant job at this and their reviews are viewed by shoppers as unbiased and often answer questions that the shopper didn't even know they had. It’s counterintuitive, but 3rd party reviews can actually lower your return rate in addition to boosting your conversion rate.
7. Analyze trends in returns
Sometimes an item just isn't right for your customers. Set up a way to track returns. If you see an item being returned a larger than usual number of times, it may be time to pull it from your inventory. At least, you'll want to revisit the product description. Maybe it's not accurately described or maybe customers hate the color once they see it in person. This is what a return policy is ideally for, and it can help reduce the amount of negative product reviews and company reviews.
Returns are a normal part of e-commerce business. However, reducing them as much as possible is key to maximizing your profit margins and your business' cash flow. To do this, adopt a strong pre-sales support program, make sure that your product images and descriptions are top notch and put a management system in place to reduce human errors in packaging and delivery.