How Should Online Retailers Handle Returns?

In our latest SaleCycle Academy video, Head of Marketing Jack Ford looks at how ecommerce sites should deal with returns. 

Video Transcription

Early January is the peak time for returns of online purchases, as people look to offload or exchange unwanted Christmas gifts.
Returns present a number of problems for retailers. There’s the obvious cost of handling returns – postage costs and staff time processing returns and refunds. There are also other problems, such as stock returning in January as existing sales are underway, which places additional pressure on resources.
The most common returns are clothing and footwear items, as these are bought online without the ability to try first, making returns a particular challenge for fashion retailers.
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However, it can also be an opportunity for retailers to impress customers with excellent service, and to upsell to people returning items. When you impress your customers and provide a great customer experience they will reward this with loyalty, research has shown that repeat customers are significantly more valuable and are more open to buying new products, suggesting the importance of customer service and their user experience.
Returns policies, and the experience customers have in taking items back, has a big impact on customers’ decisions to buy in the first place, and whether they’ll shop with a retailer again.
So, how should retailers handle returns?
Returns policies affect both customers’ decision to make a purchase in the first place, as they’re more likely to buy knowing they can return items without hassle. It also affects retention, as customers are happier shopping with a retailer who handled their returns well.

Retailers should:

• Make return policies clear and easy to understand so customers can find them before and after purchase.
• Provide options for returns. Customers like convenience, so let them choose the best options for them. This could be a service like Collect +, or allowing them to take items back to their local store.
• Make returns free. Yes, there are costs to retailers, but if you want to keep customers happy and loyal, don’t make them pay.

Returns are a fact of life for online retailers, and they should look to minimise returns through clear product information, innovations like fitting tools and customer reviews.
However, the best way to deal with returns is to make this process as easy as possible so customers are not deterred from making a purchase in the first place, and are happy to buy again even if they return items.