Holidays are a busy time in eCommerce. For a lot of companies, more orders go out in the last three months of the year than the first nine combined. Keeping up with the increased responsibility can be a full-time job, even if you have help shipping orders. But you don’t exactly get to just slip your shoes off and relax when the new year comes.
Imagine this: the holiday rush is over, and there’s a mountain of returns where your mountain of sales used to be. It’s a common scene – nearly 30% of all online purchases end up in the return pile, with that number spiking right around when stores stop stocking eggnog.
Post-holiday returns aren’t fun. There’s no way around this fact. Some companies even see negative revenue in the month of January because of them. But that doesn’t mean that post-holiday returns have to be a long winter slog.
How you manage returns can reinforce customer trust and help shoppers feel good, secure, and ready to re-engage for the next purchase. However, preparation is key!
In this post, we’re going to teach you the practical magic of transforming returns from a profit pit to customer retention opportunities. Every returned item is a chance to analyze what went right, what went wrong, and how to do better.
1. Focus On Stopping Returns Before They Start
Depending on when you read this article, you may or may not be able to cut down on returns for this year. But you can definitely cut down on returns for the next year. So why not start there?
Start by giving customers what they need to feel good about their purchases – crystal-clear images from multiple angles, highly detailed descriptions, and – especially for clothing – accurate sizing charts. As many as 76% of eCommerce shoppers seek out product descriptions when they’re making purchases. That ranks higher than reviews (71%), and images (66%) – and we know those are very important too!
It’s impossible to measure how much of an impact descriptions will have on a customer’s eventual decision to return or not return an item. This is especially true during the holidays when people are often shopping for someone else. But it’s also undeniable that this is quite possibly the easiest way to stave off returns.
2. For Unavoidable Returns, Make A Straightforward Return Policy
Finding – or understanding – a return policy shouldn’t feel like weaving your way through a maze. To that end, return policies serve two purposes:
- They are security blankets for nervous shoppers hesitant to make a purchase.
- They give your company a chance to make things right with customers so you can improve your odds of retaining them.
According to eCommerce Fastlane, more than 60% of shoppers look at return policies before making a purchase. Roughly the same percentage expect retailers to provide return windows of at least 30 days.
Your return policy should be accommodating to customers acting in good faith to the greatest extent possible without inviting return abuse. The best return policies usually meet the following criteria:
- Easy to find. Customers look for them anyway, so they may as well be readily visible so the checkout process isn’t disrupted.
- Clear. The do’s and don’ts are in friendly, plain language.
- Long. Thirty days or more is ideal.
- Backed by free shipping. About half of retailers provide free shipping on returns. But just about every customer prefers it.
Though eCommerce is well into the mainstream now, it still ultimately requires buying an item you can’t inspect in person. That means things can go wrong more frequently than they would in the store. According to WBR Insights, almost 9 in 10 customers are less likely to shop again with a retailer after a bad return experience.
The flip side of this is that showing customers you understand gives you a better chance to retain them in the long run.
3. Streamline the Return Process
When a customer decides to return a product, the ease of the process is often as important as the policy itself. An efficient, hassle-free return can convert a potentially negative experience into a positive one, encouraging customers to give your store another try.
Of course, you don’t want it to be a hassle on your side either.
To prevent that, you will want to start by creating a step-by-step guide for handling returns. This guide should be straightforward for customers to follow and internally for your staff to execute. With the right tech stack, you can allow customers to automatically pre-print return labels, submit information through online forms, and update them on the status of their return.
Preparing your staff is equally important. Training should cover not only the physical handling of returned goods but also customer service aspects to ensure interactions remain positive and professional. Being prepared for the post-holiday influx of returns can help maintain a high level of customer service during the post-peak season.
4. Figure Out How To Handle Return Exceptions
Even the best return policies need to account for the unexpected. Damaged or used items may require a different process than items returned for other reasons. Establishing a clear process for handling these exceptions is crucial. When in doubt, be generous to the customer when it seems plausible that the merchandise arrived defective or was damaged in the mail.
Some items can be restocked or refurbished to be sold at full price or a reduced price. However, for those items that cannot be resold, consider partnering with recycling firms or donating to charity, which can also enhance your brand’s social responsibility image.
Late returns present another common challenge. You will need to remain firm about your return window, or else you won’t be able to manage your inventory effectively. But it’s also equally important to be flexible in certain situations. For late returns, sometimes a middle path is the right one, such as offering store credit in lieu of a cash refund.
5. Balance Customer Service With Expense Management
Managing the financial aspects of returns is a delicate balance. Customers may expect full refunds, and you should make your best effort to provide them as often as possible. However, this isn’t always feasible or practical from a business standpoint, especially when the customer is not working within the return policy. For those situations, partial refunds, restocking fees, or exchanges can be fair compromises that also deter frivolous returns.
Optimizing this may come down to trial and error and it may need to be perfected over the next few holiday seasons. But it should never be too far from mind. Be sure to use data that you collect from returns to figure out how you can reduce returns first and foremost. Then figure out how you can reduce frivolous returns and optimize costs associated with returns management.
6. Use Returns To Ask Customers For Feedback
A return doesn’t have to be the end of your relationship with a customer. In fact, 92% of customers will make another purchase if the returns process is easy, according to the US Postal Service.
So when returns come in, use them as opportunities for engagement and gathering valuable feedback. Encourage customers to provide reasons for their returns as this information is critical for improving products and the overall shopping experience.
Use return data to identify trends or issues with particular products and take corrective action. This can turn a negative into a positive by demonstrating your brand’s dedication to continuous improvement.
When handled well, the return process can reinforce a customer’s decision to choose your brand in the future, converting what could have been a loss into a loyalty-building experience.
Mastering the post-holiday returns isn’t just about surviving an avalanche of unwanted gifts. You have more control than you think!
Set yourself up for success by preventing returns when you can and providing clear return policies when you can’t. When returns come in, make sure you know how to handle them and make sure the process is simple from start to end. Check in with your accountant every once in a while to make sure your profits are still healthy.
And as often as you can – engage with the customer and see what you can do better. Remember – the end goal isn’t just managing returns. It’s keeping customers for life!